A job order cost sheet for Ryan Company is shown below. Analyze a job cost sheet
ID: 2332369 • Letter: A
Question
A job order cost sheet for Ryan Company is shown below.
Analyze a job cost sheet and prepare entries for manufacturing costs.
Job No. 92
For 2,000 Units
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Beg. bal. Jan.1
5,000
6,000
4,200
8
6,000
12
8,000
6,400
25
2,000
27
4,000
3,200
13,000
18,000
13,800
Cost of completed job:
Direct materials
$13,000
Direct labor
18,000
Manufacturing overhead
13,800
Total cost
$44,800
Unit cost ($44,800 ÷ 2,000)
$22.40
Instructions
a. On the basis of the foregoing data, answer the following questions.
1. What was the balance in Work in Process Inventory on January 1 if this was the only unfinished job?
2. If manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year?
b. Prepare summary entries at January 31 to record the current year's transactions pertaining to Job No. 92.
Job No. 92
For 2,000 Units
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Beg. bal. Jan.1
5,000
6,000
4,200
8
6,000
12
8,000
6,400
25
2,000
27
4,000
3,200
13,000
18,000
13,800
Cost of completed job:
Direct materials
$13,000
Direct labor
18,000
Manufacturing overhead
13,800
Total cost
$44,800
Unit cost ($44,800 ÷ 2,000)
$22.40
Explanation / Answer
(a)(1) Balance in Work in Process Inventory on January 1 = 5000 + 6000 + 4200 = $15200
(a)(2) Manufacturing overhead rate = Manufacturing overhead applied / Direct labor cost
Previous year: $4200 / $6000 = 70% of direct labor cost
Current year: ($6400 + $3200) / ($8000 + $4000) = $9600 / $12000 = 80% of direct labor cost
(b) Summary journal entries:
Date Account Titles and Explanation Debit Credit Jan. 31 Work in Process Inventory - Job No. 92 29600 Direct materials (6000 + 2000) 8000 Direct labor (8000 + 4000) 12000 Manufacturing overhead (6400 + 3200) 9600 (To record material, labor and overhead cost) Jan. 31 Finished Goods Inventory - Job No. 92 44800 Work in Process Inventory - Job No. 92 44800 (To record cost of completed job transferred to Finished goods)Related Questions
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