Question

3. Job Order Costing – Inventory Accounts; Cost Flows (8pts):   DaleksRUs, Corp. is a manufacturer that uses a job-order costing system. At the beginning of April 2020, DalekRUs had only one job in process, Job 57. During April 2020, DaleksRUs continued working on Job 57, but also began working on 4 additional jobs: Job 58, Job 59, Job 60, and Job 61. Costs for these five jobs are listed below:

	Job 57	Job 58	Job 59	Job 60	Job 61
Balances on April 1, 2020:
Direct materials	$17,300	$0	$0	$0	$0
Direct labor	$2,000	$0	$0	$0	$0
Applied OH (200% of DL)	$4,000	$0	$0	$0	$0
Costs incurred during April
Direct materials	$3,950	$21,350	$13,190	$9,950	$35,100
Direct labor	$4,500	$6,750	$3,700	$5,050	$11,450
Applied OH (200% of DL)	$9,000	$13,500	$7,400	$10,100	$22,900
Status on April 30, 2020	Finished (sold)	Finished (unsold)	In process	In process	Finished (unsold)

DaleksRUs provided additional information for April:

• Job 57 sold for $69,140 on account in April
• Raw materials inventory (direct and indirect), beginning balance on 4/1/2020: $27,800
• Raw materials (direct and indirect) purchased in April 2020: $99,250
• Finished goods inventory, beginning balance on 4/1/2020: $0
• Actual Factory OH costs incurred in April: Indirect materials = $6,425; Indirect labor = $13,880; Factory rent = $12,000; Factory utilities = $1,930; Factory equipment depreciation = $28,890

Prepare journal entries for the month of April to record the below transactions (make sure to use proper journal entry formatting and include a brief description of each entry).

1. Raw materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor used and assigned to Work in Process Inventory (credit Factory Wages Payable).
4. Overhead costs applied to Work in Process Inventory.
5. Indirect materials used and assigned to Factory Overhead.
6. Indirect labor paid in cash and assigned to Factory Overhead.
7. Actual other overhead costs incurred and assigned to Factory Overhead (assume Factory rent and utilities are paid in cash).
8. Transfer of Jobs 57, 58, and 61 to Finished Goods Inventory.
9. Revenue from the sale of Job 57.
10. Cost of goods sold for Job 57.
11. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account (Assume the amount is not material).

Answer 1

No.	Account Titles and Explanation	Debit	Credit
1	Raw materials inventory	99250
	Accounts payable		99250
	(To record raw materials purchased on credit)
2	Work in process inventory	83540
	Raw materials inventory		83540
	(To record direct materials used in production)
3	Work in process inventory	31450
	Factory wages payable		31450
	(To record direct labor assigned)
4	Work in process inventory	62900
	Factory overhead		62900
	(To record overhead costs applied)
5	Factory overhead	6425
	Raw materials inventory		6425
	(To record indirect materials used and assigned)
6	Factory overhead	13880
	Cash		13880
	(To record indirect labor paid and assigned)
7	Factory overhead	42820
	Cash ($12000 + $1930)		13930
	Accumulated depreciation-factory equipment		28890
	(To record actual other overhead costs incurred)
8	Finished goods inventory	151800
	Work in process inventory		151800
	(To record completed goods transferred)
9	Accounts receivable	69140
	Sales revenue		69140
	(To record sale of Job 57)
10	Cost of goods sold	40750
	Finished goods inventory		40750
	(To record cost of Job 57 sold)
11	Cost of goods sold	225
	Factory overhead		225
	(To record assignment of underapplied overhead)

Working:

Actual overheads incurred	63125
Applied overheads	62900
Underapplied overhead	225