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Management wishes to determine various unknown balances of a job order company specializing

in custom$-$built industrial equipment, and has hired you for assistance:

Account balances Jan$\mathrm{.}1,2004$ De$.31,2004$

Materials inventory $ $205,000$ $ $?$

Work in process inventory $68,550?$

Finished goods inventory $31,00065,000$ a

Manufacturing overhead $($actual$)0247,000$

Accounts payable$-$production materials $16,00024,000$

Cost of goods sold $0769,650$ a

a Before prorating the overhead adjustment

Accounts payable are for production materials only. On January $1,2004,$ there were two jobs in

process, as follows:

Date started Job Number Direct materials Direct labor

October $15,2003206$ $$14,200$ $$8,400$

December $17,2003217$ $$6,500$ $$9,000$

$$20,700$ $$17,400$

On December $31,2004,$ there was only one job in process, Job No$\mathrm{.}372.$ However, the only available

information on the job was the accumulated direct labor costs of $$12,000$ and direct materials of

$$21,900.$ Overhead is applied to jobs as a predetermined percentage of direct labor costs. The

following additional information is available to you about events in $2004$:

Payments made to suppliers in $2004$ $$342,000$

Indirect materials issued from inventory $$14,000$

Direct labor costs incurred $$140,000$

Direct materials costs transferred to Finished

Goods Inventory this period $$403,800$

Current period applied overhead in ending

Finished Goods Inventory, December $31,2004$ $$30,000$

Required

$1.$ Cost of materials purchased.

$2.$ Direct materials issued to work in process inventory. $($Hint: Consider how much was transferred

out of work in process to finished goods.$)$

$3.$ Materials Inventory account balance, December $31,2004.$

$4.$ Overhead application rate.

$5.$ Overhead applied to work in process inventory account during $2004.$

$6.$ Over$-$ or underapplied overhead.

$7.$ Cost of goods transferred to Finished Goods Inventory account during $2004.$

$8.$ Work in process inventory account, December $31,2004.$

$9.$ Applied overhead in ending work in process inventory account, December $31,2004.$

$10.$ Proration of over$-$ or underapplied overhead to Work In Process Inventory account, Finished

Goods Inventory account and Cost of Goods Sold account.

$11.$ Balance in ending Work in Process Inventory Account, December $31,2004,$ after prorating

overhead to inventory accounts and cost of goods sold account.

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