Question

Coronodo Industries makes specialized clothing for businesses in the food and beverage industry. During September, Ricardo completed the following transactions.

Sept       1        Direct materials costing $60,000 were purchased on account.

3        Direct materials costing $32,850 were requested into production (all were used on Job A).

4 Indirect materials were purchased for cash, $32,830.

8 The company issued checks for the following factory overhead costs:  Utilities, $3,210; manufacturing insurance, $4,025; and repairs, $4,640

10        Direct materials costing $34,510 (all used on Job A) and indirect materials costing $6,480 were requested into production.

15        Recorded the following gross wages and salaries for employees: direct labor, $69,200 (all for Job A); indirect labor, $21,610; manufacturing supervision, $36,900; and sales commissions, $22,980.

15 Overhead was applied to production.

22 The company issued checks for the following factory overhead costs: utilities, $4,270; maintenance, $3,380; and rent, $3,250.

23 Direct materials costing $41,940 and indirect materials costing $8,260 were purchased.

27        Production requisitioned $28,870 of direct materials (Job A, $2,660; Job B, $8,400; Job C, $17,810) and $7,640 of indirect materials.

30        Recorded the following gross wages and salaries for employees: direct labor, $64,220 (Job A, $44,000; Job B, $9,000; Job C, $11,220); indirect labor, $30,290; manufacturing supervision, $28,520; and sales commissions, $36,200.

30 Manufacturing overhead was applied to production.

30 Jobs A (58,840 units) and B (3,525 units) were completed and transferred to finished goods inventory.  (Compute unit cost for each job; round to nearest cent).

30 Job A was shipped to the customer and the customer was billed for the sale.  It is Ricardo's practice to charge 40% over cost of production to allow adequate gross profit to cover period costs and profit.  The company uses a perpetual inventory system.

30 Adjusting entries for the following were recorded:  $4,680 for depreciation, factory equipment; $5,230 for property taxes for factory, payable at month end.

Manufacturing overhead is applied at a rate of 125 percent of direct labor cost.

A. Record the entries in journal form and post to the following T-Accounts:  Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Factory Overhead, Cash, Accounts Receivable, Accumulated Depreciation – Manufacturing Equipment, Accounts Payable, Wages and Salaries Payable, Property Taxes Payable, Sales, Cost of Goods Sold, and Selling and Administrative Expenses.

B. Compute ending balances in Materials, Work-in-process, Finished Goods, and Factory Overhead.

C. Make the journal entry to dispose of under/over applied overhead and post to the T-accounts.

Answer 1

Job cost sheet
Job	Direct material	Direct labor D	Overhead D*125%	Total Cost	Ending WIP	Finished Goods	COGS
Job A	$70,020	113200	141500	$324,720		$324,720	$324,720
Job B	8400	9000	18000	$35,400		$35,400
Job C	17810	11220	22440	$51,470	$51,470
Total	$96,230	$133,420	$181,940	$411,590	$51,470	$360,120	$324,720

ans 1
Transa	Accounst Title	Dr	Cr
Date	Accouunts Title	Dr	Cr
1-Sep	Material Inventory	$60,000
	Accounts Payable		$60,000
3-Sep	Work in process Inventory	$32,850
	Material Inventory		$32,850
4-Sep	Material Inventory	$32,830
	Accounts Payable		$32,830
8-Sep	Factory overhead	11875
	Cash (3210+4025+4640)		11875
10-Sep	Work in process Inventory	34510
	Factory overhead	6480
	Material Inventory		40990
15-Sep	Work in process Inventory	69200
	Factory overhead	58510
	Selling & administrative expenses	36900
	Salaries payable		164610
22-Sep	Factory overhead	10900
	Cash (4270+3380+3250)		10900
23-Sep	Material Inventory	50200
	Accounts Payable (41940+8260)		$50,200
27-Sep	Work in process Inventory	28870
	Factory overhead	7640
	Material Inventory		36510
30-Sep	Work in process Inventory	64220
	Factory overhead	58810
	Selling & administrative expenses	36200
	Salaries payable		159230
30-Sep	Work in process Inventory	$181,940
	Factory overhead		$181,940
30-Sep	Finsihed Goods Inventory	$360,120
	Work in process Inventory		$360,120
30-Sep	Accounts Receivable	$454,608.0
	Sales (324720*140%)		$454,608.0
	Cost of goods sold	$324,720
	Finished goods Inventory		$324,720
30-Sep	Factory overhead	$9,910
	Accumulated Depreciation-MAnufacturingequi		$4,680
	Property taxes payable		5230

Raw Material Inventory
accounts payable	60000	WIP	$96,230
accounts payable	$32,830	Factory Overhead	$14,120
accounts payable	50200
EndinG balance	$32,680
Work In process
Opening Balance	0	Finsihed Goods Inv	$360,120
b)Raw material Inventory	$96,230
Salries payable	$133,420
e) Factory Overhead	$181,940
Ending balance	$51,470
Cost of good sold
g) Finished Goods Inventory	324720
End bal	324720

Finsihed Goods
Opening Balance	0	g)Cost of good sold	$324,720
Work In process	$360,120
Ending balance	$35,400
Factory overhead
Raw material Inventory	$14,120	e)Work In process	$181,940
Cash	11875
Wages payable	117320
CAsh	10900
Accumulated Depreciation-MAnufacturingequi	$4,680
Property taxes payable	5230
		end ing balance	$17,815
ans b
Report of Job cost
Work in Process Inventory
Job C	$51,470
Finsihed Goods Inventory
Job B	$35,400
Balance	$35,400
Cost of Good sold
Job A	$324,720
Balance	$324,720
ans c	Dr	Cr
Factory overhead	$17,815
Cost of Good sold		$17,815