Question

 A job order cost sheet for Ryan Company is shown below.

 (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 Inventory on January 1 _______ 

 (2) If manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year? 

 (b) Prepare summary entries at January 31 to record the current year's transactions pertaining to Job No. 92. 

Answer 1

Solution a1:

Work in process, beginning = 6700 +6000+4200 = $16,900

Solution a2:

Last year: Overhead rate = 4200 / 6000 = 70%

Current year: (4500+3000) / (6000+4000) = 75%

Solution 2:

Transaction	Account Title	Debit	Credit
a	Work in process inventory (6000+2500)	8500
	Raw materials inventory		8500
b	Work in process inventory (6000+4000)	10000
	factory wages		10000
c	Work in process inventory (4500+3000)	7500
	Manufacturing overehad		7500
d.	Finished goods inventory	42900
	Work in process inventpry		42900