Question

Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below.

1. $76,600 in raw materials were purchased for cash.
2. $72,500 in raw materials were used in production. Of this amount, $66,000 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $150,200 were incurred and paid. Of this amount, $134,100 was for direct labor and the remainder was for indirect labor.
4. Additional manufacturing overhead costs of $126,700 were incurred and paid.
5. Manufacturing overhead of $124,300 was applied to production using the company’s predetermined overhead rate.
6. All of the jobs in process at the end of the month were completed.
7. All of the completed jobs were shipped to customers.
8. Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold.

Required:

1. Post the above transactions to T-accounts.
2. Determine the adjusted cost of goods sold for the period.

Answer 1

Cash		Raw Materials
Beg. Bal.		a.	76,600	Beg. Bal.
		c.	150,200	a.	76,600	b.	72,500
		d.	126,700
End. Bal.			353,500	End. Bal.	4,100
Work in Process	Finished Goods
Beg. Bal.				Beg. Bal.
b.	66,000	f.	324,400	f.	324,400	g.	324,400
c.	134,100
e.	124,300
End. Bal.	$0			End. Bal.	$0
Manufacturing Overhead	Cost of Goods Sold
Beg. Bal.				Beg. Bal.
b.	72500-66000 =6500	e.	124,300	g	324,400
c.	150,200-134,100 =16,100	h.	25,000	h	25,000
d.	126,700
End. Bal.	$0			End. Bal.	$349,000

Here, actual manufacturing overhead would be 6500+16100+126700 = $ 149,300

Underapplied overhead = 149,300-124,300 = $ 25,000

Requirement 2

Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied manufacturing overhead

                                                                = 324,400+25000 = $ 349,400

kindly upvote