Required information The following information applies to th

Required information

[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.

Purchased raw materials on credit, $220,000.

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

132,500

Paid $15,750 cash to a computer consultant to reprogram factory equipment.

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

Applied overhead to Jobs 136, 138, and 139.

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

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

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

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.

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	$	49,000
Job 137		33,500
Job 138		20,200
Job 139		22,800
Job 140		7,000
Total direct materials		132,500
Indirect materials		21,000
Total materials used	$	153,500

Solution

Report of Job costs Work in process inventory job 137 65,600 job 140 16,600 Balance 82,200 finished goods inventory job 139 141,600 Balance 141,600 cost of goods sold job 136 85,300 job 138 133,900 balance 219,200