Yurman Inc. uses a job-order costing system. During the month of May, the follow
ID: 2398025 • Letter: Y
Question
Yurman Inc. uses a job-order costing system. During the month of May, the following transactions occurred:
Beginning balances as of May 1 were:
May 1 Purchased materials on account for $29,740. 3 Requisitioned materials totaling $24,460 for use in production. Of the total, $9,190 was for Job 58, $8,910 for Job 59, and the remainder for Job 60. 31 Incurred direct labor for the month of $34,010, with an average wage of $19 per hour. Job 58 used 780 hours; Job 59, 610 hours; and Job 60, 400 hours. 31 Incurred and paid actual overhead of $17,850 (credit Various Payables). 31 Charged overhead to production at the rate of $4.70 per direct labor hour. 31 Completed and transferred Jobs 58 and 59 to Finished Goods. 31 Sold Job 57 (see beginning balance of Finished Goods) and Job 58 to their respective clients on account for a price of cost plus 40%.Explanation / Answer
1.
Working:
Note: Sales price is rounded off to the nearest whole dollar.
2.
3. Ending balance of raw materials: Beginning balance $2350 + Purchases $29740 - Requistions $24460 = $7630
4. Ending balance of work in process: Beginning balance $0 + Direct materials $24460 + Direct labor $34010 + Factory overheads $8413 - Jobs completed $51043 = $15840 i.e. cost of job 60
5. Ending balance of finished goods: Beginning balance $25580 + Completed and transferred $51043 - Cost of jobs sold $53256 = $23367 i.e. cost of job 59
Date General Journal Debit Credit May-01 Materials 29740 Accounts payable 29740 (To record materials purchased on account) May-03 Work in process 24460 Materials 24460 (To record direct materials requisitioned) May-31 Work in process 34010 Wages payable 34010 (To record direct labor costs incurred) May-31 Factory overheads 17850 Various payables 17850 (To record overhead costs incurred and paid) May-31 Work in process (1790 x $4.70) 8413 Factory overhead 8413 (To record factory overheads applied) May-31 Finished goods ($27676 + $23367) 51043 Work in process 51043 (To record jobs completed and transferred) May-31 Accounts receivable ($35812 + $38746) 74558 Sales 74558 (To record sales) May-31 Cost of goods sold ($25580 + $27676) 53256 Finished goods 53256 (To record the cost of goods sold)Related Questions
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