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, $29,050.
	b. Materials requisitioned and factory labor used:

Job	Materials	Factory Labor
301	$2,870	$2,870
302	3,690	3,770
303	2,300	1,920
304	8,510	7,050
305	5,000	5,250
306	3,770	3,240
For general factory use	1,030	4,110

	c. Factory overhead costs incurred on account, $5,400.
	d. Depreciation of machinery and equipment, $2,000.
	e. The factory overhead rate is $52 per machine hour. Machine hours used:

Job	Machine Hours
301	27
302	35
303	29
304	70
305	39
306	25
Total	225

	f. Jobs completed: 301, 302, 303 and 305.
	g. Jobs were shipped and customers were billed as follows: Job 301, $8,310; Job 302, $11,120; Job 303, $14,320.

	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.

Answer 1

	Direct	Direct	Overhead	total
Job	materials	labor	applied
301	2,870	2,870	1404	7,144
302	3,690	3,770	1820	9,280
303	2,300	1,920	1508	5,728
304	8,510	7,050	3640	19,200
305	5,000	5,250	2028	12,278
306	3,770	3,240	1300	8,310
total	26,140	24,100	11700	61,940
total cost of jobs completed
jobs
301			7,144
302			9,280
303			5,728
305			12,278
total cost of jobs completed			34,430
cost of jobs sold and sale price
jobs			COGS		Sale
301			7,144		8,310
302			9,280		11,120
303			5,728		14,320
total			22,152		33,750
1)	Journal Entries
	Account titles & Explanations				Debit	Credit
a)	Raw materials inventory				29,050
	Accounts payable					29,050
b)	Work in process inventory				50,240
	Factory overhead				5,140
	Raw materials invetory					27,170
	Factory wages payable					28,210
c)	Factory overhead				5,400
	accounts payable					5,400
d)	Factory overhead				2,000
	Accumulated depreciation					2,000
e)	work in process inventory				11700
	Factory overhead					11700
f)	finished goods inventory				34,430
	work in process inventory					34,430
g)	accounts receivable				33,750
	sales					33,750
	Cost of goods sold				22,152
	Finished goods inventory					22,152
2)	T-Account
	work in process inventory
	b)	50,240	f)	34,430
	e)	11700
	end bal	27,510
	(note entry b includes DM and DL
	if required u can show separately)
	finished goods inventory
	f)	34,430	g)	22,152
	end bal	12,278
3)	Schedule of unfinished jobs
		Direct	Direct	Overhead	total
	Job	materials	labor	applied
	304	8,510	7,050	3640	19,200
	306	3,770	3,240	1300	8,310
	total				27,510
4)	Schedule of finished jobs
		Direct	Direct	Overhead	total
	Job	materials	labor	applied
	305	5,000	5,250	2028	12,278