Question

Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related...

Tybee Industries Inc. uses a job order cost system. The following data summarize the operations related to production for January, the first month of operations:

a. Materials purchased on account, $29,800.
b. Materials requisitioned and factory labor used:

Job

Materials

Factory Labor

301 $ 2,960 $2,775
302 3,620 3,750
303 2,400 1,875
304 8,100 6,860
305 5,100 5,250
306 3,750 3,340
For general factory use 1,080 4,100
c. Factory overhead costs incurred on account, $5,500.
d. Depreciation of machinery and equipment, $1,980.
e. The factory overhead rate is $54 per machine hour. Machine hours used:
Job Machine Hours
301 25
302 36
303 30
304 72
305 40
306 25
Total 228
f. Jobs completed: 301, 302, 303 and 305.
g. Jobs were shipped and customers were billed as follows: Job 301, $8,250; Job 302, $11,200; Job 303, $15,000.
Required:
1. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 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.
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.
CHART OF ACCOUNTS
Tybee Industries Inc.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable
125 Notes Receivable
126 Interest Receivable
131 Materials
132 Work in Process
133 Factory Overhead
134 Finished Goods
141 Supplies
142 Prepaid Insurance
143 Prepaid Expenses
181 Land
191 Machinery and Equipment
192 Accumulated Depreciation-Machinery and Equipment
LIABILITIES
210 Accounts Payable
221 Utilities Payable
231 Notes Payable
236 Interest Payable
241 Lease Payable
251 Wages Payable
252 Consultant Fees Payable
EQUITY
311 Common Stock
340 Retained Earnings
351 Dividends
390 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
520 Wages Expense
531 Selling Expenses
532 Insurance Expense
533 Utilities Expense
534 Office Supplies Expense
540 Administrative Expenses
561 Depreciation Expense-Machinery and Equipment
590 Miscellaneous Expense
710

Interest Expense

1. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 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.

Work in Process
Bal.
Finished Goods
Bal.

3. Prepare a schedule of unfinished jobs to support the balance in the work in process account. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.

Tybee Industries Inc.

Schedule of Unfinished Jobs

1

Job

Direct Materials

Direct Labor

Factory Overhead

Total

2

3

4

Balance of Work in Process, January 30

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 list for the exact wording of the answer choices for text entries.

Tybee Industries Inc.

Schedule of Completed Jobs

1

Job

Direct Materials

Direct Labor

Factory Overhead

Total

2

Homework Answers

Answer #1

Solution:

1.) Journal Entries:

No. Date Account Title and Explanation Post Ref. Debit ($) Credit ($)
1.

Mar.31

a.

Materials 29,800
Accounts payable 29,800
(Record materials purchased)
2.

Mar.31

b.

Work in process 49,780
Factory overhead 51,80
Materials 27,010
Wages payable 27,950
(Record materials requisition and factory overhead)
3.

Mar.31

c.

Factory overhead 5,500
Accounts payable 5,500
(Record factory overhead costs on account)
4. Mar.31 d. Factory overhead 1,980
Accumulated depreciation - machinery and equipment 1,980
(Record depreciation on account)
5. Mar.31 e. Work in process 12,312
Factory overhead ($54 ×228 hrs.) 12,312
(Record overhead applied to job)
6. Mar.31 f. Finished goods 34,804
Work in process 34,804
(Record completion of jobs)
7.

Mar.31

g1

Accounts receivable 34,450
Sales revenue 34,450
( Record sales on account)
8. Mar.31 g2 Cost of goods sold 22,294
Finished goods 22,294
(Record the cost of goods sold)

Explanation:

1.) Work in process $2,960+$3,620+$2,400+$8,100+$5,100+$3,750+$2,775+$3,750+$1,875+$6,860+$5,250+$3,340 =$49,780
2. Factory overhead $4100+$1,080 = $5,180
3.) Accounts Receivable $8,250+ $11,200+$15,000 =$34,450
4.) Cost of sales $7,085+$9,314+$5,895 =$22,294

2.) T - accounts

Work in process
b. 49,780 f. 34804
e. $12,312
Bal. 27288
Finished goods
f. 34804 g. 22294
Bal. 12510

3.) Schedule of unfinished jobs:

Job Direct Materials Direct labor Factory overhead Total
No. 304 8100 6860 3888($54 × 72) 18848
No. 306 3750 3340 1350($54 × 25) 8440
Total 11850 10200 5238 27,288

4.) Schedule of completed jobs:

Job Direct Materials Direct labor Factory overhead Total
No. 305 5,100 5,250 2,160($54 × 40) 12,510

* If you have any query regarding this question, please ask me.

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