Question

Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January, the first month of operations:

	a. Materials purchased on account, $29,800.
	b. Materials requisitioned and factory labor used:

Job	Materials	Factory Labor
301	$ 2,960	$2,775
302	3,620	3,750
303	2,400	1,875
304	8,100	6,860
305	5,100	5,250
306	3,750	3,340
For general factory use	1,080	4,100

	c. Factory overhead costs incurred on account, $5,500.
	d. Depreciation of machinery and equipment, $1,980.
	e. The factory overhead rate is $54 per machine hour. Machine hours used:

Job	Machine Hours
301	25
302	36
303	30
304	72
305	40
306	25
Total	228

	f. Jobs completed: 301, 302, 303 and 305.
	g. Jobs were shipped and customers were billed as follows: Job 301, $8,250; Job 302, $11,200; Job 303, $15,000.

	Required:
1.	Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles.
2.	Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.
3.	Prepare a schedule of unfinished jobs to support the balance in the work in process account.*
4.	Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.* * Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. 2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. Work in Process Bal. Finished Goods Bal. 3. Prepare a schedule of unfinished jobs to support the balance in the work in process account. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries. Tybee Industries Inc. Schedule of Unfinished Jobs 1 Job Direct Materials Direct Labor Factory Overhead Total 2 3 4 Balance of Work in Process, January 30 4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account. Refer to the list of Amount Descriptions list for the exact wording of the answer choices for text entries. Tybee Industries Inc. Schedule of Completed Jobs 1 Job Direct Materials Direct Labor Factory Overhead Total 2

Answer 1

Solution

A)
DATE	DESCRIPTION	POST. REF.	DEBIT AMOUNT	CREDIT AMOUNT
1	Materials		29,800
	The Accounts Payable			29,800
2	Work in Process	49,780
	Factory Overhead	5,180
	Materials		27,010
	Wages Payable		27,950
3	Factory Overhead	5,500
	Accounts Payable		5,500
4	Factory Overhead	1,980
	Accumulated Depreciation—Machinery & Equipment		1,980
5	Work in Process	12,312
	Factory Overhead (228 hours × $54)		12,312
6	Finished Goods	34,804
	Work in Process		34,804
Job	Direct Material	Direct Labour	Factory overhead = $54 x Machine hours	Total
301	2,960	2,775	1,350	7,085
302	3620	3,750	1,944	9,314
303	2400	1,875	1,620	5,895
305	5100	5250	2,160	12,510
Total				34,804
7	Accounts Receivable	34,450
	Sales		34,450
	(8250+11200+15000)
	Cost of Goods Sold	22,294
	Finished Goods		22,294
	(Job 301 + Job 302 + Job 303)

3)Schedule of unfinished jobs:
	Direct Material	Direct Labour	Factory Overhead	Total
Job 304	8,100	6,860	3,888	18,848
Job 306	3,750	3,340	1,350	8,440
Balance of Work in Process, Jan. 31				27,288
4)Schedule of completed jobs:
	Direct Material	Direct Labour	Factory Overhead	Total
Job 305	5,100	5,250	2,160	12,510
Finished Goods, January 30				12,510