Question

Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January 2016, the first month of operations:

	a. Materials purchased on account, $28,610.
	b. Materials requisitioned and factory labor used:

Job	Materials	Factory Labor
301	$2,810	$2,640
302	3,710	3,920
303	2,340	1,910
304	8,210	7,110
305	5,360	5,270
306	3,780	3,390
For general factory use	1,060	4,040

	c. Factory overhead costs incurred on account, $5,710.
	d. Depreciation of machinery and equipment, $1,910.
	e. The factory overhead rate is $55 per machine hour. Machine hours used:

Job	Machine Hours
301	24
302	36
303	29
304	73
305	41
306	24
Total	227

	f. Jobs completed: 301, 302, 303 and 305.
	g. Jobs were shipped and customers were billed as follows: Job 301, $8,520; Job 302, $10,770; Job 303, $15,650.

	Required:
A.	Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles.
B.	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.
C.	Prepare a schedule of unfinished jobs to support the balance in the work in process account.*
D.	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.

Answer 1

Solution A:

Job Cost Sheets
Job No	Direct Material	Direct labor	Manufacturing overhead	Total
301	$2,810.00	$2,640.00	$1,320.00	$6,770.00
302	$3,710.00	$3,920.00	$1,980.00	$9,610.00
303	$2,340.00	$1,910.00	$1,595.00	$5,845.00
304	$8,210.00	$7,110.00	$4,015.00	$19,335.00
305	$5,360.00	$5,270.00	$2,255.00	$12,885.00
306	$3,780.00	$3,390.00	$1,320.00	$8,490.00
Total	$26,210.00	$24,240.00	$12,485.00	$62,935.00

Journal Entries - Tybee Industries
S. no.	Particulars	Debit	Credit
a	Raw material inventory Dr	$28,610.00
	To Accounts payable		$28,610.00
	(To record purchase of raw material on account)
b	Work in process inventory Dr	$50,450.00
	Manufacturing overehead Dr	$5,100.00
	To Raw materials inventory		$27,270.00
	To Factory Wages		$28,280.00
	(To record consumption of material)
c	Manufacturing overehead Dr	$5,710.00
	To Accounts payable		$5,710.00
	(To record factory overhead incurred)
d	Manufacturing overehead Dr	$1,910.00
	To Depreciation - Machinery and Equipment		$1,910.00
	(To record depreciation on machinery and equipment)
e	Work in process inventory Dr	$12,485.00
	To Manufacturing overhead		$12,485.00
	(To apply manufacturing overhead on production)
f	Finished goods inventory Dr ($6,770 + $9,610 + $5,845 + $12,885)	$35,110.00
	To Work in process inventory		$8,210.00
	(To record completion of Job No 301, 302, 303 and 305)
g1	Accounts receivables Dr	$34,940.00
	To Sales Revenue		$34,940.00
	(To record sales of Job 301, 302 and 303)
g2	Cost of goods sold Dr($6,770 + $9,610 + $5,845)	$22,225.00
	To Finished goods inventory		$22,225.00
	(To record cost of goods sold)

Solution B:

Work In Process Account
Event	Debit	Event	Credit
b	$50,450.00	f	$35,110.00
e	$12,485.00
Ending Balance	$27,825.00

Finished goods inventory
Event	Debit	Event	Credit
f	$35,110.00	g	$22,225.00
Ending Balance	$12,885.00

Solution C:

Schedule of Unfinished Jobs
Job No	Direct Material	Direct labor	Manufacturing overhead	Total
304	$8,210.00	$7,110.00	$4,015.00	$19,335.00
306	$3,780.00	$3,390.00	$1,320.00	$8,490.00
Total	$11,990.00	$10,500.00	$5,335.00	$27,825.00

Solution D:

Schedule of completed jobs on hand
Job No	Direct Material	Direct labor	Manufacturing overhead	Total
305	$5,360.00	$5,270.00	$2,255.00	$12,885.00
Total	$5,360.00	$5,270.00	$2,255.00	$12,885.00