Question

Micro Enterprises had the following job order transactions during the month of April. Record the transactions in T-accounts, including issuance of materials, labor, and factory overhead applied; completed jobs sent to finished goods inventory, and sales of finished goods. Also show T-accounts in place of Job Cost Sheets for each job, and place of the subsidiary ledger for Finished Goods.

Apr

1 Purchased materials on acct, $35,000

10 Issued Direct materials to Job 33, $10,000, issued indirect materials of $700

11 Issued direct materials to Job 34, $8,000, issued indirect materials of $430

12 Issued direct materials to Job 35, $11,000, issued indirect materials of $670

25 Incurred labor of $21,300: Job 33, $6,000 (300 hours), Job 34, $4,000 (200 hours). Job 35, $5,000 (250 hours); also incurred indirect labor of $6,300

25 Applied factory overhead: $4.85 per direct labor hour

30 Transferred Job # 33 and 35 to the finished goods inventory account as products F and H

30 Sold product F for $25,000 on account. Calculate the Gross Profit.

Answer 1

RAW MATERIAL INVENTORY
Accounts payable		35,000	WIP-Job 33		10,000
			WIP Job 34		8,000
			WIP Job 35		11,000
			Manufacturing OH		1,800
Ending Balance		4,200
MANUFACTURING OVERHEADS
Raw material		1,800	WIP-Job 33		1,455
Wages payable		6,300	WIP Job 34		970
			WIP Job 35		1213
Ending balance		4,462
WORK IN PROCESS INVENTORY-JOB 33
Raw material		10,000	Finished Goods Inv.		17,455
Wages payable		6,000
Manufacturing Overheads		1,455
Balance		0
WORK IN PROCESS INVENTORY-Job 34
Raw material Inv.		8,000
Wages Payable		4,000
Manufacturing Overheads		970
Balance		12,970
WORK IN PROCESS INVENTORY-Job 35
Raw material Inv.		11,000	Finished Goods inv.		17,213
Wages Payable		5,000
Manufacturing Overheads		1,213
Balance		0
FINISHED GOODS INVENTORY
WIP Job 33		17,455	Cost of Goods sold		17,455
WIP Job 35		17,213
Balance		17,213
Cost of goods sold
Finished Goods inv.		17,455
Balance		17,455
Sales revenue
			Accounts receivable		25,000
			Balance		25000
Gross Profit:
Sales revenue			25000
Less: Cost of goods sold			17455
Gross Profit:			7545