Question

Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,400 of indirect materials and $12,000 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: Job 301 Job 302 Direct materials $9,000 Direct materials $21,100 Direct labor 7,700 Direct labor 16,800 Factory overhead 5,467 Factory overhead 11,928 Total $22,167 Total $49,828 Job 303 Job 304 Direct materials $25,200 Direct materials $14,800 Direct labor 16,100 Direct labor 13,900 Factory overhead — Factory overhead

— Required: Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.

a. Direct and indirect materials used.

b. Direct and indirect labor used.

c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).

d. Completion of Jobs 301 and 302.

Answer 1

	Date	General Journal	Debit	Credit
a.	Jan. 31	Work in process inventory	70100
		Factory overhead	7400
		Raw materials inventory		77500
		(To record direct and indirect materials used)
b.	Jan. 31	Work in process inventory	54500
		Factory overhead	12000
		Factory payroll		66500
		(To record direct and indirect labor used)
c.	Jan. 31	Work in process inventory (71% x $54500)	38695
		Factory overhead		38695
		(To record factory overhead applied)
d.	Jan. 31	Finished goods inventory	71995
		Work in process inventory		71995
		(To record jobs completed and transferred to finished goods)

Overhead rate = $5467/$7700 = 71% of direct labor cost

Note: Kindly use exact wording of account titles per the chart of accounts since the same has not been provided with the question.