In: Accounting
The following activities took place in the work in process inventory account during April:
Beginning Balance $15,000
Direct Materials Used $120,000
Total manufacturing labor incurred in April was $162,500, 80% of this amount represented direct labor. The predetermined manufacturing overhead rate is 120% of direct labor cost. Actual manufacturing overhead costs for April amounted to $150,000.
Two jobs were completed with total costs of $120,000 and $85,000, respectively. They were sold on account for $265,000 and $155,000, respectively.
a) Compute the balance in work in process inventory on April 30.
b) Record the journal entry for direct materials used in April.
c) Record the journal entry for total manufacuring labor incurred in April.
d) Record the journal entry to allocate manufacturing labor to the appropriate accounts.
e) Record the journal entry for allocated manufacturing overhead for April.
f) Record the entry to move the completed juobs into finished goods inventory.
g) Record the entry to sell the two completed jobs on account.
Rreq a: | ||||||
Balance in WIP on April 30: | ||||||
beginning Balance | 15000 | |||||
Add: Current manufacturing cost | ||||||
Material | 120,000 | |||||
Labour (162500*80%) | 130000 | |||||
OH (130,000*120%) | 156000 | |||||
Total Cost of goods | 421000 | |||||
Less: Cost f Goods completed | 205000 | |||||
Ending balancec in WIP | 216000 | |||||
Journal entry: | ||||||
S.no. | Accounts title and explanation | Debit $ | Credit $ | |||
b. | Work in Process Inventory Dr. | 120,000 | ||||
Raw material inventory | 120,000 | |||||
c. | Factory Wages Dr. | 162500 | ||||
Cash account | 162500 | |||||
d. | Work in process Inventory Dr. | 130000 | ||||
Factory Overheads Account Dr. | 32500 | |||||
Factory Wages | 162500 | |||||
e. | Work in Process Inventory Dr. | 156000 | ||||
Factory Overheads | 156000 | |||||
f. | Finished Goods inventory Dr. | 205000 | ||||
Work in process Inventory | 205000 | |||||
g. | Accounts receivable Dr. | 420000 | ||||
Sales revenue | 420000 | |||||
Cost of goods sold dr. | 205000 | |||||
Finished Goods inventory | 205000 | |||||