PLEASE, explain this process if possible. 21 Exercise 15-3 A job order cost shee

Question

PLEASE,   explain this process if possible.

21 Exercise 15-3 A job order cost sheet for Ryan Company is shown below For 2,000 Units Manufacturing Job No. 92 Materials Labor Beg bal. Jan. 1 6,500 6,200 6,280 8 400 3,000 27 4,400 19,080 15780 Cost of completed job: Direct materials Direct labor $15.780 19,080 15,276 $50,136 25 07 Total cost Unit cost (850.1 36 2,000) (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 Balance in work in process rmentory on January 1 (2) If manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used each year? (Round answers to 0 decimal places, e.g. 55%) Last year Current year Overhead rate (b) Prepare summary entries at January 31 to record the current year's transactions pertaining to Job No (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date Account Titles and Explanation Credit Jan 31 Work n Process inventory R Malerisis irwwrlory (To record raw materials used) 31 Work in Process ineory Faciory Labor 12, (To record factory labor used (To record manufacturing overhead) 31 ehed Goods tory Work in Pscess dor To record job completed

Explanation / Answer

Solution:

(a) 1. $17,176, or ($6,500 + $6,280 + $4,396).

2. Last year 70%, or ($4,396 ÷ $6,280); this year 85% (either $7,140 ÷ $8,400 or $3,740 ÷ $4,400).

(b) Jan. 31 Work in Process Inventory 9,280
Raw Materials Inventory 9,280

15,780 - 6,500 = 9,280

31 Work in Process Inventory 12,800
Factory Labor 12,800

19,080 - 6,280 = 12,800

31 Work in Process Inventory 10,880
Manufacturing Overhead 10,880

15,276 - 4,396 = 10,880

31 Finished Goods Inventory 50,136
Work in Process Inventory 50,136

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