The following costs were incurred in February by Container Corp., which produces customized steel storage bins:...

The following costs were incurred in February by Container Corp., which produces customized steel storage bins:

Direct material purchased on account		$136,800
Direct material used for jobs:
Job #217	$80,640
Job #218	12,960
Other jobs	96,480	190,080
Direct labor costs for month:
Job #217	$18,720
Job #218	25,200
Other jobs	35,280	79,200
Actual overhead costs for February		396,000

The balance in Work in Process Inventory on February 1 was $30,240, which consisted of $20,160 for Job #217 and $10,080 for Job #218. The February beginning balance in Direct Material Inventory was $80,280. Actual overhead is applied to jobs at a rate of $4.95 per dollar of direct labor cost. Job #217 was completed and transferred to Finished Goods Inventory during February. Job #217 was delivered to the customer at the agreed-upon price of cost plus 35 percenta. Prepare journal entries to record the preceding information.

a. Prepare journal entries to record the preceding information.

b.Determine the February ending balance in WIP Inventory. $Answer
c. How much of the balance determined in part (b) relates to Job #218? $Answer

Solutions

Expert Solution

No.	General Journal	Debit	Credit
1	Raw materials inventory	136800
	Accounts payable		136800
	(To record raw materials purchased on account)
2	WIP-Job #217	80640
	WIP-Job #218	12960
	WIP-Other jobs	96480
	Direct material inventory		190080
	(To record the direct materials issued)
3	WIP-Job #217	18720
	WIP-Job #218	25200
	WIP-Other jobs	35280
	Cash/Accounts payable		79200
	(To record the labor costs)
4	Manufacturing overhead	396000
	Various accounts		396000
	(To record the actual overhead cost)
5	WIP-Job #217 ($4.95 x $18720)	92664
	WIP-Job #218 ($4.95 x $25200)	124740
	WIP-Other jobs ($4.95 x $35280)	174636
	Manufacturing overhead		392040
	(To record OH applied)
6	Finished goods inventory ($20160 + 80640 + 18720 + 92664)	212184
	WIP-Job #217		212184
	(To record the completion of Job 217)
7	Cash/Accounts receivable	286448
	Sales revenue (1.35 x $212184)		286448
	(To record sales)
8	Cost of goods sold	212184
	Finished goods inventory		212184
	(To record the cost of sales)

b. February ending balance in WIP inventory: $479,376

c. Balance relating to Job #218: $172,980

Working:

Job #218	172980
Other jobs	306396
Total WIP $	479376

ekkarill92 answered 1 year ago

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