Question

Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below.

1. $75,900 in raw materials were purchased for cash.
2. $72,600 in raw materials were used in production. Of this amount, $66,400 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $152,200 were incurred and paid. Of this amount, $134,100 was for direct labor and the remainder was for indirect labor.
4. Additional manufacturing overhead costs of $125,200 were incurred and paid.
5. Manufacturing overhead of $123,500 was applied to production using the company’s predetermined overhead rate.
6. All of the jobs in process at the end of the month were completed.
7. All of the completed jobs were shipped to customers.
8. Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold.

Required:

1. Post the above transactions to T-accounts. (Cash, Raw Materials, Work in Process, Finished Goods, Manufacturing Overhead, and Cost of Goods Sold)
2. Determine the adjusted cost of goods sold for the period.

Answer 1

Prepare T-accounts as follows:

Cash
		a	$75,900
		c	$152,200
		d	$125,200
End. Bal.	$353,300
Raw Material
a	$75,900	b	$72,600
End. Bal.	$3,300
WIP
b	$66,400
c	$134,100
e	$123,500	f	$324,000
Finished goods Inventory
f	$324,000	g	$324,000
Manufactured overhead
b ($72600-$66400)	$6,200	e	$123,500
c ($152200-$134100)	$18,100	h (b/f)	$26,000
d	$125,200
Cost of goods sold
g	$324,000
h	$26,000
End. Bal.	$350,000

_____________________________________________________

Adjusted COGS = $350,000