Question

Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below. $75,700 in raw materials were purchased for cash. $71,800 in raw materials were used in production. Of this amount, $65,400 was for direct materials and the remainder was for indirect materials. Total labor wages of $152,600 were incurred and paid. Of this amount, $134,300 was for direct labor and the remainder was for indirect labor. Additional manufacturing overhead costs of $125,000 were incurred and paid. Manufacturing overhead of $122,700 was applied to production using the company’s predetermined overhead rate. All of the jobs in process at the end of the month were completed. All of the completed jobs were shipped to customers. Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold.

Post the above transactions to T-accounts.

Determine the adjusted cost of goods sold for the period.

Answer 1

Rawmaterials inventory (RM)					Manufacturing overhead (MOH)
Purchase	$ 75,700	WIP	$ 65,400		IDM	$ 10,300	Applied MOH	$ 122,700
		IDM	$ 10,300		IDL	$ 18,300	COGS (Under-applied)	$ 30,900
					General overhead	$ 125,000
Work in process inventory (WIP)					Cost of goods sold (COG)
DM	$ 65,400	FG	$ 322,400		FG	$ 322,400
DL	$ 134,300				MOH (under-applied)	$ 30,900
MOH applied	$ 122,700
Finished goods inventory (FG)
WIP	$ 322,400	COGS	$ 322,400

Cost of goods sold before adjustments	$ 322,400
Add: Under-applied	$ 30,900
Cost of goods sold adjusted balance	$ 353,300