Problem 155A Phillips Corporations fiscal year ends on Novem

Problem 15-5A Phillips Corporation\'s fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year. Other data: 1. On December 1, two jobs were in process: Job No. 154 and Job No. 155. These jobs had combined direct materials costs of $9,850 and direct labor costs of $17,100. Overhead was applied at a rate that was 75% of direct labor cost. During December, Job Nos. 156, 157, and 158 were started. On December 31, Job No. 158 was unfinished. This job had charges for direct materials $4,500 and direct labor 2. 3. On December 1, Job No. 153 was in the finished goods warehouse. It had a total cost of $5,200. On December 31, Job No. 157 was the only job finished that was not sold. It had 4. Manufacturing overhead was $1,345 underapplied in December. List the letters (a) through (m) and indicate the amount pertaining to each letter a cost of $4,300

Solution

a) Opening Raw Materials = Requisitions + Ending Balance - Purchases

= 17550+ 8135 - 17725

= $7960

b) Job 1 was in progress at the beginning of the year.

Beginning Balance of Work in Progress = Direct Material + Direct Labor + Overheads

= 9850 + 17100 +(75%*17100)

= $39,775

c) Direct Materials = Requisitions - Indirect Materials

= 17550- 3400

= $14150

d) Overheads = Direct Labor * Overhead Rate

= 9100 * 75 %

= $6825

e) Ending Work in Progress = Job No 158

= Direct Labor + Direct Materials + Overheads

= 4500+5400 + (75%*5400)

= $13,950

(f) Jobs completed = Beginning balance +Direct Materials + Direct Labor + Overhead - Ending Balance

= 39,775+14150+9100+6825 - 13950

=$55,900

(g) Opening balance of finished goods = Job No.153 has opening finished goods = $5200

(h) Completed Jobs is same as in Work in Progress completed jobs. Since completed job from WIP is transferred to Finished Goods.

Completed Job = $55,900

(i) Cost of goods Sold = Beginning balance +Completed Jobs - Ending Balance

= $5200 +55900 - 4300

= $56800

(j) Ending balance = 4300

(k) Wages assigned = 12,225

(l) Indirect Labor = Factory Wages-Direct Labor

= 12225- 9100

= 3125

(m) Overhead applied = Actual overhead - Under applied overhead

= (3400+3125+1645)- 1345

= 6825