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[The following information applies to the questions displayed below.] Widmer Watercrafts predetermined overhead rate is 200% of direct labor. Information on the companys production activities during May follows.
Purchased raw materials on credit, $200,000.
Materials requisitions record use of the following materials for the month.
Job 136
$
48,000
Job 137
32,000
Job 138
19,200
Job 139
22,400
Job 140
6,400
Total direct materials
128,000
Indirect materials
19,500
Total materials used
$
147,500
Paid $15,000 cash to a computer consultant to reprogram factory equipment.
Time tickets record use of the following labor for the month. These wages were paid in cash.
Job 136
$
12,000
Job 137
10,500
Job 138
37,500
Job 139
39,000
Job 140
3,000
Total direct labor
102,000
Indirect labor
24,000
Total
$
126,000
Applied overhead to Jobs 136, 138, and 139.
Transferred Jobs 136, 138, and 139 to Finished Goods.
Sold Jobs 136 and 138 on credit at a total price of $525,000.
The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).
Depreciation of factory building
$
68,000
Depreciation of factory equipment
36,500
Expired factory insurance
10,000
Accrued property taxes payable
35,000
Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.
3. Post the journal entries for the transactions to the following T-accounts, each of which started the month with a zero balance. RAW MATERIALS INVENTORY, WORK IN PROCESS INVENTORY, FACTORY OVERHEAD, FINISHED GOODS INVENTORY, COST OF GOODS SOLD
4. Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold.
REPORT OF JOB COSTS
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