Question

In: Accounting

A job order cost sheet for Ryan Company is shown below. Job No. 92 For 2,000...

A job order cost sheet for Ryan Company is shown below.

Job No. 92

For 2,000 Units


Date

Direct
Materials

Direct
Labor

Manufacturing
Overhead

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)

Solutions

Expert Solution

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)

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