Question

In: Accounting

Stine Company uses a job order cost system. On May 1, the company has a balance...

Stine Company uses a job order cost system.

On May 1, the company has a balance in Work in Process Inventory of $3,500 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,500.

During May, a summary of source documents reveals the following.

Job

Number

Materials Requisition Slips

Labor Time Tickets

429

2,500

1,900

430

3,500

3,000

431

4,400

10,400

7,600

12,500

General use

800

1,200

11,200

13,700

Stine Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Job No. 429 is completed during the month.

Instructions

(a) Prepare FOUR summary journal entries to record (1) the requisition slips, (2) the time tickets, (3) the assignment of mfg overhead to jobs, and (4) the completion of Job No. 429.

(b) Post the entries to Work in Process Inventory, and prove the agreement of the control account with the job cost sheets. (Use a T-account.)

Materials

Labor

Overhead

Overhead

Solutions

Expert Solution

Solution:

a.)

No. Date Account Titles and Explanation Debit

Credit  
i May, 31 Work-in-process Inventory $       10,400
Manufacturing Overhead $            800
       Raw Material Inventory $   11,200
ii May, 31 Work in Process Inventory $       12,500
Manufacturing Overhead $         1,200
Factory Labor $   13,700
iii May, 31 Work in Process Inventory $         7,500
      Manufacturing Overhead $     7,500
iv May, 31 Finished Goods Inventory $         7,540
       Work in Process Inventory $     7,540

b.)

Work in Process Inventory
May, 1 $                                                         3,500 May, 31 $           7,540
May, 31 $                                                       10,400
May, 31 $                                                       12,500
May, 31 $                                                         7,500
May, 31 Balance $                                                       26,360

.

Job Cost Sheet
Job Beginning Work in Process Direct Material Direct Labor Manufacturing Overhead Total
430                                                             1,500                    3,500               3,000                   1,800          9,800
431                                                                   -                      4,400               7,600                   4,560        16,560
                                                            1,500                    7,900             10,600                   6,360        26,360

ekkarill92 answered 10 months ago
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