Question

urtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations:

	a. Materials purchased on account, $28,790.
	b. Materials requisitioned and factory labor used:

Job	Materials	Factory Labor
301	$2,880	$2,910
302	3,690	3,860
303	2,300	1,780
304	7,820	6,990
305	5,310	5,050
306	3,700	3,280
For general factory use	1,070	4,180

	c. Factory overhead costs incurred on account, $5,600.
	d. Depreciation of machinery and equipment, $1,970.
	e. The factory overhead rate is $53 per machine hour. Machine hours used:

Job	Machine Hours
301	25
302	34
303	30
304	71
305	42
306	26
Total	228

	f. Jobs completed: 301, 302, 303 and 305.
	g. Jobs were shipped and customers were billed as follows: Job 301, $8,270; Job 302, $11,720; Job 303, $15,730.

	Required:
1.	Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on March 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. For grading purposes enter transactions in alphabetical order. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank.
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. Amount Descriptions Balance of Work in Process, January 30 Finished Goods, January 30 (Job 305) Job No. 301 Job No. 302 Job No. 303 Job No. 304 Job No. 305 Job No. 306

Answer 1

			Factory	overhead	total
		Materials	labor	applied
	Job 301	2,880	2,910	1325	7,115
	job 302	3,690	3,860	1802	9,352
	job 303	2,300	1,780	1590	5,670
	job 304	7,820	6,990	3763	18,573
	job 305	5,310	5,050	2226	12,586
	job 306	3,700	3,280	1378	8,358
	total	25,700	23,870	12084	61,654
1)	Journal Entries
	Accounting titles & Explanations				Debit	Credit
a)	Raw materials inventory				28,790
	Accounts payable					28,790
b)	work in process inventory				49,570
	Factory overhead				5,250
	Raw materials inventory					26,770
	Factory wages payable					28,050
c)	Factory overhead				5,600
	Accounts payable					5,600
d)	Factory overhead				1,970
	Accumulated depreciation					1,970
e)	Work in process inventory				12,084
	Factory overhead					12,084
f)	finished goods inventory				34,723
	work in process inventory					34,723
g)	Accounts receivable				35720
	Sales					35,720
	Cost of goods sold				22,137
	finished goods inventory					22,137
2)	Work in process inventory
	b)		25,700	f)		34,723
	b)		23,870
	e)		12,084
	end balance		26,931
	Finished goods inventory
	f)		34,723	g)		22,137
	End bal		12,586
3)	Schedule of Work in process account
	job	Direct	Direct	overhead	total
		materials	labor	applied
	job 304	7,820	6,990	3763	18,573
	job 306	3,700	3,280	1378	8,358
	total	11,520	10,270	5141	26,931
4)	Schedule of finished goods inventory
	job	Direct	Direct	overhead	total
		materials	labor	applied
	job 305	5,310	5,050	2226	12,586