Question

Entries for Factory Costs and Jobs Completed

Collegiate Publishing Inc. began printing operations on March 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $4,500 of indirect materials and $8,200 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:

Job 301				Job 302
Direct materials	$12,500			Direct materials	$18,750
Direct labor	31,000			Direct labor	42,200
Factory overhead	7,750			Factory overhead	10,550
Total	$51,250			Total	$71,500
Job 303				Job 304
Direct materials	$9,940			Direct materials	$14,310
Direct labor	16,500			Direct labor	17,100
Factory overhead	—			Factory overhead	—

Journalize the summary entry to record each of the following operations for March (one entry for each operation):

a. Direct and indirect materials used. If an amount box does not require an entry, leave it blank.

	Work in Process
	Factory Overhead
	Materials

b. Direct and indirect labor used. If an amount box does not require an entry, leave it blank.

	Work in Process
	Factory Overhead
	Wages Payable

c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). If an amount box does not require an entry, leave it blank.

	Work in Process
	Factory Overhead

d. Completion of Jobs 301 and 302. If an amount box does not require an entry, leave it blank.

	Finished Goods
	Work in Process

Answer 1

No	Account	Debit	Credit
A	Work in process (12,500+18,750+9,940+14,310)	55,500
	Factory Overhead	4,500
	Materials		60,000
B	Work in Process (31,000+42,200+16,500+17,100)	106,800
	Factory Overhead	8,200
	Wages payable		115,000
C	Work in Process	26,700
	Factory Overhead		26,700
	(25%*Direct labor 106,800)- Note
D	Finished goods	122,750
	Work in Process (51,250+71,500)		122,750

.

Predetermined overhead rate = Estimated overhead/Estimated direct labor cost = 7,750/31,000 = 25% of direct labor cost