Question

Unit Cost, Ending Work in Process, Journal Entries

During August, Pamell Inc. worked on two jobs. Data relating to these two jobs follow:

	Job 64		-Job 65
Units in each order	500-----------		1,000
Units sold	500		—(zero)
Materials requisitioned---	$19,840		$15,760
Direct labour hours	900		1,260
Direct labour cost	$17,100		$23,940

Overhead is assigned on the basis of direct labour hours at a rate of $37. During August, Job 64 was completed and transferred to Finished Goods. Job 65 was the only unfinished job at the end of the month.

Required:

1. Calculate the per-unit cost of Job 64. Round your answer to the nearest cent. $_______________ per unit

2. Compute the ending balance in the Work in Process account. $__________

3. Prepare the journal entries reflecting the completion and sale on account of Job 64. The selling price is 160 percent of cost. If required, round all journal entry amounts to the nearest whole dollar.

Transfer to finished goods ___________

(To record completion of Job 64)

Sales________________

(To record sales of Job 64)

COGS __________________

(To record cost of goods sold for Job 64)

Answer 1

1) Per unit cost of job 64 = (19840+17100+900*37)/500 = $140.48 per unit

2) Ending work in process account = (15760+23940+1260*37) = $86320

3) JOurnal entry :

Date	account and explanation	debit	credit
	Finished goods	70240
	Work in process		70240
	(To record completion of Job 64)
	Account receivable (70240*160%)	112384
	Sales revenue		112384
	(To record sales of Job 64)
	Cost of goods sold	70240
	Finished goods		70240
	(To record cost of goods sold for Job 64)