Question

Sager Company manufactures variations of its product, a technopress, in response to custom orders from its customers. On May 1, the company had no inventories of work in process or finished goods but held the following raw materials.

Material M	350	units		@		$	290		=		$	101,500
Material R	135	units		@			270		=			36,450
Paint	100	units		@			80		=			8,000
Total cost											$	145,950

On May 4, the company began working on two technopresses: Job 102 for Worldwide Company and Job 103 for Reuben Company.

Purchased raw materials on credit and recorded the following information from receiving reports and invoices.

Receiving Report No. 426, Material M, 290 units at $290 each.
Receiving Report No. 427, Material R, 130 units at $270 each.

Record these purchases with a single journal entry. Enter the receiving report information on the materials ledger cards.

Requisitioned the following raw materials for production.

Requisition No. 35, for Job 102, 189 units of Material M.
Requisition No. 36, for Job 102, 72 units of Material R.
Requisition No. 37, for Job 103, 98 units of Material M.
Requisition No. 38, for Job 103, 102 units of Material R.
Requisition No. 39, for 27 units of paint.

Enter amounts for direct materials requisitions on the materials ledger cards and the job cost sheets. Enter the indirect materials amount on the materials ledger card.

Received the following employee time tickets for work in May.

Time tickets Nos. 1 to 10 for direct labor on Job 102, $86,000.
Time tickets Nos. 11 to 30 for direct labor on Job 103, $53,000.
Time tickets Nos. 31 to 36 for equipment repairs, $20,000.

Record direct labor from the time tickets on the job cost sheets.

Paid cash for the following items during the month: factory payroll, $159,000, and miscellaneous overhead items, $114,000. Use the time tickets to record the total direct and indirect labor costs.

Finished Job 102 and transferred it to the warehouse. The company assigns overhead to each job with a predetermined overhead rate equal to 80% of direct labor cost.

Enter the allocated overhead on the cost sheet for Job 102, fill in the cost summary section of the cost sheets.

Delivered Job 102 and accepted the customer’s promise to pay $520,000 within 30 days.

Applied overhead cost to Job 103 based on the job’s direct labor to date.

Required:
Complete the materials ledger cards for Material M, Material R, and paint using the information given in part a and b. Complete the job cost sheets for Jobs 102 and 103 using the information given in part a, b, c and e. Prepare journal entries for part a through g.

Complete the job cost sheets for Jobs 102 and 103 using the information given in part a, b, c and e.

JOB COST SHEET Customer's Name Worldwide Company Job No. 102 Direct Materials Direct Labor Overhead Costs Applied Requisition Number Amount Time Ticket Number Amount Rate % Amount Total Total Summary of Costs Total cost of Job Customer's Name Reuben Company Job No. 103 Direct Materials Direct Labor Overhead Costs Applied Requisition Number Amount Time Ticket Number Amount Rate % Amount Total Total Summary of Costs Total cost of Job

Prepare journal entries for part a through g. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Record the purchase of raw materials on credit from the receiving reports and invoices given in letter a). Record these purchases with a single journal entry.

Note: Enter debits before credits.

	Transaction General Journal Debit Credit a.

Answer 1

	Material Ledger Card
Item	Material M
	Received				Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requisition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
1-May									350	290	101500
4-May	426	290	290	84100					640	290	185600
4-May					35	189	290	54810	350	290	101500
4-May					37	98	290	28420	252	290	73080
	Material Ledger Card
Item	Material R
	Received				Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requisition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
1-May									135	270	36450
4-May	427	130	270	35100					265	270	71550
4-May					36	72	270	19440	193	270	52110
4-May					38	102	270	27540	91	270	24570
	Material Ledger Card
Item	Paint
	Received				Issued				Balance
Date	Receiving Report	Units	Unit Price	Total Price	Requisition	Units	Unit Price	Total Price	Units	Unit Price	Total Price
1-May									100	80	8000
4-May					39	27	80	2160	73	80	5840
JOB COST SHEET
Customer's Name	Worldwide Company			Job No.	102
	Direct Materials	Direct Labor		Overhead Costs Applied
Requisition Number	Amount	Time Ticket Number	Amount	Rate %	Amount
35	54810	1 to 10	86000	80%	68800	(86000*80%)
36	19440
Total	74250	Total	86000		68800
Summary of Costs
	Direct Material	74250
	Direct Labour	86000
	Overhead	68800
Total cost of Job		229050
Customer's Name	Reuben Company			Job No.	103
	Direct Materials	Direct Labor		Overhead Costs Applied
Requisition Number	Amount	Time Ticket Number	Amount	Rate %	Amount
37	28420	11 to 30	53000	80%	42400	(53000*80%)
38	27540
Total	55960	Total	53000		42400
Summary of Costs
	Direct Material	55960
	Direct Labour	53000
	Overhead	42400
Total cost of Job		151360
Record these purchases with a single journal entry. Enter the receiving report information on the materials ledger cards.
a)	Raw Material Dr.	119200	(84100+35100)
	Accounts Payable		119200
d)	Factory Payroll	159000
	Cash		159000
	Factory Overhead	114000
	Cash		114000
e)	Finished Goods Inventory	229050
	Goods in Process		229050
f)	Accounts Receivable	520000
	Sale		520000
g)	Goods in Process Inventory	130210
	Factory Overhead	2160
	Raw Material Inventory		132370
	Goods in Process Inventory	139000
	Factory Overhead	20000
	Factory Payroll		159000