Question

Problem 19-3A 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.

Purchased raw materials on credit, $240,000.

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

Job 136	$48,500
Job 137	32,500
Job 138	19,200
Job 139	22,400
Job 140	7,000
Total direct materials	129,600
Indirect materials	21,500
Total materials used	$151,100

Paid $15,250 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.

Job 136	$12,200
Job 137	10,500
Job 138	37,500
Job 139	39,600
Job 140	3,400
Total direct labor	103,200
Indirect labor	24,500
Total	$127,700

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 $540,000.

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

Depreciation of factory building	$69,500
Depreciation of factory equipment	37,500
Expired factory insurance	10,000
Accrued property taxes payable	36,000

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.

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.

Report of Job Costs
Work in Process Inventory
Balance	0
Finished Goods Inventory
Balance	0
Cost of Goods Sold
Balance	$0

Answer 1

Reports of Job Costs
Goods in Process Inventory
Job 137	64,000
Job 140	17,200
Balance	81,200
Finished Goods Inventory
Job 139	141,200
Balance	141200
Cost of Goods Sold
Job 136	85,100
Job 138	131,700
Balance	216,800
Workings:
	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140
Materials	48500	32500	19200	22400	7000
Labor	12200	10500	37500	39600	3400
Overhead	24400	21000	75000	79200	6800
Total	85100	64000	131700	141200	17200