Question

Exercise 15-3

A job order cost sheet for Ryan Company is shown below.

Job No. 92						For 2,000 Units
Date		Direct Materials		Direct Labor		Manufacturing Overhead
Beg. bal. Jan. 1		5,500		6,700		4,690
8		6,700
12				8,800		7,040
25		2,900
27				4,000		3,200
		15,100		19,500		14,930

Cost of completed job:
Direct materials		$ 15,100
Direct labor		19,500
Manufacturing overhead		14,930
Total cost		$ 49,530
Unit cost ($ 49,530 ÷ 2,000)		$ 24.77

(a) On the basis of the foregoing data, answer the following questions.

(1) What was the balance in Work in Process Inventory on January 1 if this was the only unfinished job?

Balance in Work in Process Inventory on January 1

$ ????

(2) If manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year? (Round answers to 0 decimal places, e.g. 55%.)

		Last year		Current year
Overhead rate		?	%	enter percentages rounded to 0 decimal places	%

(b) Prepare summary entries at January 31 to record the current year’s transactions pertaining to Job No. 92. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 31	enter an account title to record raw materials used on January 31	enter a debit amount	enter a credit amount
	enter an account title to record raw materials used on January 31	enter a debit amount	enter a credit amount
	(To record raw materials used)
31	enter an account title to record factory labor used	enter a debit amount	enter a credit amount
	enter an account title to record factory labor used	enter a debit amount	enter a credit amount
	(To record factory labor used)
31	enter an account title to record manufacturing overhead	enter a debit amount	enter a credit amount
	enter an account title to record manufacturing overhead	enter a debit amount	enter a credit amount
	(To record manufacturing overhead)
31	enter an account title to record job completed	enter a debit amount	enter a credit amount
	enter an account title to record job completed	enter a debit amount	enter a credit amount
	(To record job completed)

Answer 1

1	Balance in beginning WIP on january 1 should be
	Direct material	$          5,500
	Direct labor	$          6,700
	manufacturing Overhead	$          4,690
	Total WIP Jan 1	$       16,890
2	Last year overhead rate used
	4690/6700
	70.00%
	This year obverhead rate used
	7040/8800
	80.00%
	or
	3200/4000
	80.00%
3
Date	Account Titles and Explanation	Debit	Credit	Hint
Jan. 31	WIP Inventory	$ 9,600		(6700+2900)
	RM Inventory		$ 9,600
	(To record raw materials used)
31	WIP Inventory	$12,800		(8800+4000)
	Factory Labor		$12,800
	(To record factory labor used)
31	WIP Inventory	$10,240
	manufacturinng OH		$10,240	(7040+3200)
	(To record manufacturing overhead)
31	Finished Goods Inventory	$49,530		(15100+19500+14930)
	WIP Inventory		$49,530
	(To record job completed)