Question

Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,600 of indirect materials and $12,100 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:

Job 301		Job 302
Direct materials	$10,600	Direct materials	$21,900
Direct labor	8,300	Direct labor	15,000
Factory overhead	6,557	Factory overhead	11,850
Total	$25,457	Total	$48,750

Job 303		Job 304
Direct materials	$23,200	Direct materials	$15,500
Direct labor	19,000	Direct labor	11,100
Factory overhead	—	Factory overhead	—

Required:

Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles. a. Direct and indirect materials used. b. Direct and indirect labor used. c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). d. Completion of Jobs 301 and 302.

Answer 1

	Date	Description	Debit	Credit
a.	Jan. 31	Work in Process (10600 + 21900 + 23200 + 15500)	71200
		Factory overhead	7600
		Materials		78800
		(To record direct and indirect materials used)
b.	Jan. 31	Work in Process (8300 + 15000 + 19000 + 11100)	53400
		Factory overhead	12100
		Wages expense		65500
		(To record direct and indirect labor used)
c.	Jan. 31	Work in Process (6557 + 11850 + 15010 + 8769)	42186
		Factory overhead		42186
		(To record factory overhead applied)
d.	Jan. 31	Finished Goods (25457 + 48750)	74207
		Work in Process		74207
		(To record completion of jobs 301 and 302)

Note: Kindly confirm exact wording of account titles from the Chart of Accounts since the same is not provided with the question.

Workings:

Factory overhead rate:

Job 301: $6557/$8300 = 79% of direct labor cost

Job 302: $11850/$15000 = 79% of direct labor cost

Factory overhead applied to job 303 = 79% x $19000 = $15010

Factory overhead applied to job 304 = 79% x $11100 = $8769