In: Accounting
A job order cost sheet for Ryan Company is shown
below.
Job No. 92 |
For 2,000 Units |
|||||
|
Direct |
Direct |
Manufacturing |
|||
Beg. bal. Jan. 1 | 6,300 | 7,000 | 4,900 | |||
8 | 7,000 | |||||
12 | 9,000 | 7,200 | ||||
25 | 2,600 | |||||
27 | 5,000 | 4,000 | ||||
15,900 | 21,000 | 16,100 |
Cost of completed job: | ||
Direct materials | $15,900 | |
Direct labor | 21,000 | |
Manufacturing overhead | 16,100 | |
Total cost | $53,000 | |
Unit cost ($53,000 ÷ 2,000) | $26.50 |
(a) On the basis of the foregoing data, answer the following
questions.
(1) What was the balance in Work in Process Inventory on January 1
if this was the only unfinished job?
Balance in Work in Process Inventory on January 1 | $ |
(2) If manufacturing overhead is applied on the basis of direct
labor cost, what overhead rate was used in each year?
(Round answers to 0 decimal places, e.g.
55%.)
Last year | Current year | |||||
Overhead rate | % | % |
(b) Prepare summary entries at January 31 to record the current
year’s transactions pertaining to Job No. 92. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
Jan. 31 |
|||
(To record raw materials used) |
|||
31 |
|||
(To record factory labor used) |
|||
31 |
|||
(To record manufacturing overhead) |
|||
31 |
|||
(To record job completed) |
Answer:-
A.
1.Calculation of Balance Work in Progress
Particulars | Amount |
Direct Materials | $ 6,300.00 |
Add: Direct Labour | $ 7,000.00 |
Add: Manufacturing Overhead | $ 4,900.00 |
Cost of Begining of WIP | $ 18,200.00 |
Balance in work in process as on January 1st = $ 18,200
2.
Calculate total manufacturing cost for the Current Year, in the manner given below:
Particulars |
Manufacturing Cost |
Labour Cost |
Incurred on January 12 | $ 7,200.00 | $ 9,000.00 |
Add: Incurred on January 27 | $ 4,000.00 | $ 5,000.00 |
Total Cost | $ 11,200.00 | $ 14,000.00 |
Calculate the overhead rate in the manner given below:
Particulars | Workings |
Last Year |
Current Year |
Manufactiuring Overhead Cost | (i) | $ 4,900.00 | $ 11,200.00 |
Direct Labour Cost | (ii) | $ 7,000.00 | $ 14,000.00 |
Overhead Rate | III=[(i)/(ii)]*100 | 70% | 80% |
B.
Prepare Journal Entry to record current year's transactions related to job no.92 in the manner below.
Date | Account Title and Explanation | Debit | Credit |
Jan-31 |
Work in Process
Inventory (7000+2600) |
$ 9,600.00 | |
Raw Materials Inventory | $ 9,600.00 | ||
(to Record Raw Material Use) | |||
Jan-31 |
Work in Process
Inventory (9000+5000) |
$14,000.00 | |
Factory Labour | $14,000.00 | ||
(To Record Use Factory Labour) | |||
Jan-31 |
Work in Process
Inventory (7200+4000) |
$11,200.00 | |
Manufacturing Overhead | $11,200.00 | ||
(To Record Manufacturing Overhead) | |||
Jan-31 | Finished Goods Inventory | $53,000.00 | |
Work in Process Inventory | $53,000.00 | ||
(To Record Job Completed) |
If you do not get anything in this solution, please put a comment and I will help you out. Do not give a downvote instantly. It is a humble request. If you like my answer, please give an upvote.