Question

Cullumber Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,770 and two jobs in process: Job No. 429 $2,430, and Job No. 430 $1,340. During May, a summary of source documents reveals the following. Job Number Materials Requisition Slips Labor Time Tickets 429 $2,940 $2,300 430 3,850 3,400 431 4,680 $11,470 8,200 $13,900 General use 940 1,570 $12,410 $15,470 Cullumber Company applies manufacturing overhead to jobs at an overhead rate of 68% of direct labor cost. Job No. 429 is completed during the month.

Prepare summary journal entries to record (1) the requisition slips, (2) the time tickets, (3) the assignment of manufacturing overhead to jobs, and (4) the completion of Job No. 429. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit (1) May 31 (2) 31 (3) 31 (4) 31

Post the entries to Work in Process Inventory, and prove the agreement of the control account with the job cost sheets. (Post entries in the order of journal entries presented in the previous part.) Work in Process Inventory May 31 BalanceMay 31May 1 Balance May 31 BalanceMay 31May 1 Balance May 31May 31 BalanceMay 1 Balance May 1 BalanceMay 31May 31 Balance May 1 BalanceMay 31May 31 Balance May 1 BalanceMay 31 BalanceMay 31 May 31May 1 BalanceMay 31 Balance May 1 BalanceMay 31 BalanceMay 31 May 1 BalanceMay 31May 31 Balance May 31 BalanceMay 31May 1 Balance Job Cost Sheets Job No. Beginning Work in Process Direct Material Direct Labor Manufacturing Overhead Total 430 $ $ $ $ $ 431 $ $ $ $ $

Answer 1

Solution:

1.)

No.	Date	Account Title and Explanation	Debit ($)	Credit($)
1.	May 31	Work in process inventory	11,470
		Manufacturing overhead	940
		To raw materials inventory		12,410
		Record requisition slips
2.)	May 31	Work in process inventory	13,900
		Manufacturing overhead	1,570
		To factory labor		15,470
		Record the time tickets
3.	May 31	Work in process inventory ($13,900 ×68% )	9,452
		To manufacturing overhead		9,452
		Record assignment of manufacturing overhead
4.	May 31	Finished goods inventory (Job no. 429 =$2,430 +$2,940 + $2,300 + ($2,300 × 68%)	9,234
		To work in process inventory		9,234
		Record the completion of job no. 429

2.) Work in process inventory:

Debit		Credit
May 31, Beginning balance	$3,770	May 31, Jobs completed	$9,234
May 31, Direct materials	$11,470
May 31, Direct labor	$13,900
May 31, Manufacturing overhead applies	$9,452
	$38,592
May 31,Ending Balance	$29,358

c.)

Job costs sheets:

Job No.	Beginning balance	Direct materials	Direct labor	Overhead applied	Total
Job 430	$1,340	$3,850	$3,400	$2,312($3,400 × 68%)	$10,902
Job. 431	-	$4,680	$8,200	$5,576($8,200 × 68%)	$18,456
All job in process	$1,340	$8,530	$11,600	$7,888	$29,358