Question

Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows. Purchased raw materials on credit, $220,000. Materials requisitions record use of the following materials for the month. Job 136 $ 48,500 Job 137 32,500 Job 138 19,800 Job 139 22,800 Job 140 6,600 Total direct materials 130,200 Indirect materials 20,500 Total materials used $ 150,700 Paid $15,250 cash to a computer consultant to reprogram factory equipment. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 $ 12,100 Job 137 10,600 Job 138 37,700 Job 139 39,200 Job 140 3,400 Total direct labor 103,000 Indirect labor 24,000 Total $ 127,000 Applied overhead to Jobs 136, 138, and 139. Transferred Jobs 136, 138, and 139 to Finished Goods. Sold Jobs 136 and 138 on credit at a total price of $535,000. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building $ 70,000 Depreciation of factory equipment 38,000 Expired factory insurance 11,000 Accrued property taxes payable 35,500 Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. 4. Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold.

Answer 1

Solution 4:

Job Cost Sheets
Job No	Direct materials	Direct labor	Manufacturing overhead	Total
136	$48,500.00	$12,100.00	$24,200.00	$84,800.00
137	$32,500.00	$10,600.00	$21,200.00	$64,300.00
138	$19,800.00	$37,700.00	$75,400.00	$132,900.00
139	$22,800.00	$39,200.00	$78,400.00	$140,400.00
140	$6,600.00	$3,400.00	$6,800.00	$16,800.00
Total	$130,200.00	$103,000.00	$206,000.00	$439,200.00

Work In Process Inventory
Event	Debit	Event	Credit
b	$130,200.00	f	$358,100.00
d	$103,000.00	Ending Balance	$81,100.00
e	$178,000.00
i	$28,000.00
Total	$439,200.00	Total	$439,200.00

Finished Goods Inventory
Event	Debit	Event	Credit
f	$358,100.00	g	$217,700.00
		Ending Balance	$140,400.00
Total	$358,100.00	Total	$358,100.00

Cost of goods sold
Event	Debit	Event	Credit
g	$217,700.00	Ending balance	$217,700.00
Total	$217,700.00	Total	$217,700.00

Report of Job Cost Sheet - Widmer Watercraft
Particulars	Amount
Work In Process Inventory:
Job 137	$64,300.00
Job 140	$16,800.00
Balance	$81,100.00
Finished Goods Inventory:
Job 139	$140,400.00
Balance	$140,400.00
Cost of goods sold:
Job 136	$84,800.00
Job 138	$132,900.00
Balance	$217,700.00