Required information Problem 153A Source documents journal e

Required information

Problem 15-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3

[The following information applies to the questions displayed below.]

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.

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a. Purchased raw materials on credit, $200,000.

b. Materials requisitions record use of the following materials for the month.

130,400

c. Paid $15,250 cash to a computer consultant to reprogram factory equipment.

d. Time tickets record use of the following labor for the month. These wages were paid in cash.

e. Applied overhead to Jobs 136, 138, and 139.

f. Transferred Jobs 136, 138, and 139 to Finished Goods.

g. Sold Jobs 136 and 138 on credit at a total price of $545,000.

h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

i. 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.

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Problem 15-3A Part 4

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.

Job 136	$	49,500
Job 137		32,500
Job 138		19,200
Job 139		22,800
Job 140		6,400
Total direct materials		130,400
Indirect materials		21,500
Total materials used	$	151,900

Solution

Answer 4. Finished goods WIP Beg. Bal                -   Beg. Bal                -   WIP    360,000    219,000 Cost of Goods Sold Direct Materials    130,400    360,000 Finished Goods Inventory Factory Labor    103,500 End. Bal.    141,000 Factory Overhead    200,200 End. Bal.      74,100 Work-in-Process, Ending: 137 140 Total Direct Material            32,500            6,400            38,900 Factory Labor            10,600            3,400            14,000 Factory Overhead -200%            21,200            6,800            21,200 Total            64,300          16,600            74,100 Finished Good Inventory, Ending 139 Direct Material            22,800 Factory Labor            39,400 Factory Overhead -200%            78,800 Total          141,000 Cost of Goods Sold: 136 138 Total Direct Material            49,500          19,200            68,700 Factory Labor            12,000          38,100            50,100 Factory Overhead -200%            24,000          76,200          100,200 Total            85,500       133,500          219,000