Question

A Job order cost sheet for Ryan Company is shown below. Job No. 92 Direct Materials Direct Labor For 2,000 Units Manufacturing Overhead Date Beg. bal. Jan. 1 5,500 6,700 4,690 6,700 8,800 7,040 2,900 4,000 19,500 3,200 14,930 15,100 Cost of completed job: Direct materials Direct labor Manufacturing overhead Total cost Unit cost ($49,530 + 2,000) $15,100 19,500 14,930 $49,530 $24.77 (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 s

Answer 1

Answer:

(a)(1) Balance in Work in Process Inventory on January 1 = 5500 + 6700 + 4690 = $16890

(a)(2) Manufacturing overhead rate = Manufacturing overhead applied / Direct labor cost

Previous year: $4690 / $6700 = 70% of direct labor cost

Current year: ($7040 + $3200) / ($8800 + $4000) = $10240/ $12800 = 80% of direct labor cost

(b) journal entries:

Date	Account Titles and Explanation	Debit ($)	Credit ($)
Jan. 31	Work in Process Inventory - Job No. 92	$32,300
	Direct materials (6700+ 2900)		$9,600
	Direct labor (8800 + 4000)		$12,800
	Manufacturing overhead (6700 + 3200)		$9,900
	(To record material, labor and overhead cost)
Jan. 31	Finished Goods Inventory - Job No. 92	$49,530
	Work in Process Inventory - Job No. 92		$49,530
	(To record cost of completed job transferred to Finished goods)