Question

Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations: a. Materials purchased on account, $30,100. b. Materials requisitioned and factory labor used: Job Materials Factory Labor 301 $3,110 $2,720 302 3,710 3,810 303 2,400 1,970 304 8,500 6,870 305 5,210 5,410 306 3,850 3,290 For general factory use 1,080 4,120 c. Factory overhead costs incurred on account, $5,440. d. Depreciation of machinery and equipment, $1,980. e. The factory overhead rate is $53 per machine hour. Machine hours used: Job Machine Hours 301 25 302 35 303 32 304 73 305 38 306 24 Total 227 f. Jobs completed: 301, 302, 303 and 305. g. Jobs were shipped and customers were billed as follows: Job 301, $7,990; Job 302, $10,960; Job 303, $14,290. Required: 1. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on March 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles. 2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. For grading purposes enter transactions in alphabetical order. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank. 3. Prepare a schedule of unfinished jobs to support the balance in the work in process account.* 4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.* *Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries

Answer 1

Kurtz Fencing Inc
Individual Job sheet
Job	Job 301	Job 302	Job 303	Job 304	Job 305	Job 306	Total
Machine Hours	25	35	32	73	38	24	227
Multiply: overhead rate	$                53	$              53	$                53	$                53	$                53	$              53	$                53
Applied overhead	$          1,325	$        1,855	$          1,696	$          3,869	$          2,014	$        1,272	$        12,031
Direct material	$          3,110	$        3,710	$          2,400	$          8,500	$          5,210	$        3,850	$        26,780
Direct labor	$          2,720	$        3,810	$          1,970	$          6,870	$          5,410	$        3,290	$        24,070
Applied overhead	$          1,325	$        1,855	$          1,696	$          3,869	$          2,014	$        1,272	$        12,031
Total cost	$          7,155	$        9,375	$          6,066	$        19,239	$        12,634	$        8,412	$        62,881
Status	Finished goods (sold)	Finished goods (sold)	Finished goods (sold)	In progress	Finished goods (unsold)	In progress	In progress
Cost included in	Cost of goods Sold	Cost of goods Sold	Cost of goods Sold	Work in progress inventory	Finished goods inventory	Work in progress inventory	Work in progress inventory

For Journal Entry (b)	Direct	Indirect	Total	Remarks
Material	$        26,780	$        1,080	$        27,860	Credited to Raw material inventory
Labor	$        24,070	$        4,120	$        28,190	Credited to wages payable/factory labor
Total	$        50,850	$        5,200	$        56,050
Remarks	Debited to Work in progress inventory	Debited to Manufacture overhead (also known as factory overhead)

Answer 1

Kurtz Fencing Inc
Journal entries
Event	General Journal	Debit	Credit
A	Raw material inventory	$        30,100
	Account payable		$        30,100
	(To record purchase of raw material inventory.)
B	Work in progress inventory	$        50,850
	Manufacture overhead	$          5,200
	Raw material inventory		$        27,860
	Wages payable/factory labor		$        28,190
	(To record material and labor used.)
C	Manufacture overhead	$          5,440
	Accounts payable		$          5,440
	(To record manufacture overhead on account.)
D	Manufacture overhead	$          1,980
	Accumulated depreciation -equipment		$          1,980
	(To Depreciation on factory equipment.)
E	Work in progress inventory	$        12,031
	Manufacture overhead		$        12,031
	(To record Manufacture overhead Applied to Job.)
F	Finished goods inventory	$        35,230
	Work in progress inventory		$        35,230
	(To record completion of Finished goods inventory.) (7155+9375+6066+12634)
G1	Accounts Receivable	$        33,240
	Sales Revenue		$        33,240
	(To record sales revenue on accounts.) (7990+10960+14290)
G2	Cost of goods sold	$        22,596
	Finished goods inventory		$        22,596
	(To record Finished goods Inventory sold.) (7155+9375+6066)

Answer 2

Work in Progress Inventory
Transaction	Debit	Credit	Transaction
B	50,850	35,230	F
E	12,031
End. Bal	$        27,651
Finished Goods Inventory
Transaction	Debit	Credit	Transaction
F	35,230	22,596	G2
End. Bal	$        12,634

Answer 3

Prepare a schedule of unfinished jobs
Job 304	$          19,239
Job 306	$            8,412
Balance in the work in process account	$          27,651

Answer 4

Prepare a schedule of completed jobs on hand
Job 305	$          12,634
Balance in the finished goods account	$          12,634