Question

Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January, the first month of operations:

	a. Materials purchased on account, $31,030.
	b. Materials requisitioned and factory labor used:

Job	Materials	Factory Labor
301	$3,060	$2,710
302	3,640	3,820
303	2,430	1,870
304	8,280	7,010
305	5,340	5,100
306	3,790	3,170
For general factory use	1,060	4,260

	c. Factory overhead costs incurred on account, $5,290.
	d. Depreciation of machinery and equipment, $1,960.
	e. The factory overhead rate is $52 per machine hour. Machine hours used:

Job	Machine Hours
301	23
302	37
303	29
304	70
305	40
306	23
Total	222

	f. Jobs completed: 301, 302, 303 and 305.
	g. Jobs were shipped and customers were billed as follows: Job 301, $8,430; Job 302, $10,960; Job 303, $15,550.

	Required:
1.	Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles.
2.	Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.
3.	Prepare a schedule of unfinished jobs to support the balance in the work in process account.*
4.	Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.* *Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.

Answer 1

Working notes:

Job	Material	Factory wages	Overhead applied	Total
301	$3,060	$2,710	$1,196 (23*$52)	$6,966
302	3,640	3,820	1,924 (37*$52)	9,384
303	2,430	1,870	1,508 (29*$52)	5,808
304	8,280	7,010	3,640 (70*$52)	18,930
305	5,340	5,100	2,080 (40*$52)	12,520
306	3,790	3,170	1,196 (23*$52)	8,156
Total	$26,540	$23,680	$11,544	$61,764

1.

	General Journal	Debit	Credit
a	Raw material inventory	$31,030
	Accounts payable		$31,030
b	Work in process inventory	$50,220
	Factory overhead ($1,060+4,260)	5,320
	Raw material inventory		$27,600
	Factory wages		27,940
c	Factory overhead	$5,290
	Accounts payable		$5,290
d	Factory overhead	$1,960
	Accumulated depreciation - machinery and equipment		$1,960
e	Work in process inventory (222*$52)	$11,544
	Factory overhead		$11,544
f	Finished goods inventory ($6,966+9,384+5,808+12,520)	$34,678
	Work in process inventory		$34,678
g	Accounts receivable ($8,430+10,960+15,550)	$34,940
	Sales		$34,940
	Cost of goods sold ($6,966+9,384+5,808)	$22,158
	Finished goods inventory		$22,158

2.

Work in process inventory				Finished goods inventory
Beg.Bal.	$0	$34,678	f	Beg.Bal.	$0	$22,158	g
b	26,540			f	34,678
b	23,680			End.bal.	$12,520
e	11,544
End.Bal.	$27,086

3.

Schedule of unfinished Job
	Job 304	Job 306	Total
Direct material	$8,280	$3,790	$12,070
Factory wages	7,010	3,170	10,180
Overhead applied	3,640	1,196	4,836
Total	$18,930	$8,156	$27,086

4.

Schedule of Finished Goods
	Job 305
Direct material	$5,340
Factory wages	5,100
Overhead applied	2,080
Total	$12,520