The following selected data were taken from the books of the Owens O-Rings Compa
ID: 2600239 • Letter: T
Question
The following selected data were taken from the books of the Owens O-Rings Company. The company uses job costing to account for manufacturing costs. The data relate to April operations.
A) Materials and supplies were requisitioned from the stores clerk as follows:
Job 405, material X, $9,000.
Job 406, material X, $5,000; material Y, $8,000.
Job 407, material X, $9,000; material Y, $5,200.
For general factory use: materials A, B, and C, $4,300.
B) Time tickets for the month were chargeable as follows:
C) Other information:
Factory paychecks for $38,700 were issued during the month.
Various factory overhead charges of $21,400 were incurred on account.
Depreciation of factory equipment for the month was $7,400.
Factory overhead was applied to jobs at the rate of $5.20 per direct labor hour.
Job orders completed during the month: Job 405 and Job 406.
Selling and administrative costs were $4,100.
Factory overhead is closed out only at the end of the year.
The end of the month Work-in-Process Inventory balance would be:
$37,440.
$44,480.
$70,100.
$114,580.
Job 405 $ 24,500 5,000 hours Job 406 $ 16,000 5,600 hours Job 407 $ 10,000 3,900 hours Indirect labor $ 5,700Explanation / Answer
Work in process or work in progress is the sum of all manufacturing costs put in to the production process for partially completed products.
Expenses for uncompleted Job 407 = Raw material + Labor + Overhead
= $ 9,000 + $ 5,200 + $ 10,000 + ($ 5.20 x 3,900)
= $ 9,000 + $ 5,200 + $ 10,000 + $ 20,280
= $ 44,480
Work-in-Process Inventory is $ 44,480
Hence option “2nd $ 44,480” is correct answer.
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