Question

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, $260,000.

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

Job 136	$	48,000
Job 137		33,500
Job 138		20,000
Job 139		23,400
Job 140		6,800
Total direct materials		131,700
Indirect materials		21,500
Total materials used	$	153,200

Paid $15,500 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	$	12,000
Job 137		10,800
Job 138		38,100
Job 139		39,400
Job 140		3,800
Total direct labor		104,100
Indirect labor		26,000
Total	$	130,100

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 $525,000.

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

Depreciation of factory building	$	68,000
Depreciation of factory equipment		38,000
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.

rev: 02_01_2017_QC_CS-77139

Problem 19-3A Part 4

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.

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

Answer 1

Solution:-

Part 4:-

Report of job cost
Work in Process Inventory
Job 137	65,900
Job 140	18,200
Balance	84,100
Finished Goods Inventory
Job 139	141,600
Balance	141,600
Cost of Goods Sold
Job 136	84,000
Job 138	134,300
Balance	218,300

Explanation:-

Particulars	Job 136	Job 137	Job 138	Job 139	Job 140
Materials	48,000	33,500	20,000	23,400	6,800
Labour	12,000	10,800	38,100	39,400	3,800
Overhead (200% of labour)	24,000	21,600	76,200	78,800	7,600
Total cost	84,000	65,900	134,300	141,600	18,200

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