Question

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

Job No. 92						For 2,000 Units
Date		Direct Materials		Direct Labor		Manufacturing Overhead
Beg. bal. Jan. 1		5,300		6,000		4,200
8		6,000
12				7,000		5,600
25		2,500
27				4,000		3,200
		13,800		17,000		13,000

Cost of completed job:
Direct materials		$13,800
Direct labor		17,000
Manufacturing overhead		13,000
Total cost		$43,800
Unit cost ($43,800 ÷ 2,000)		$21.90

(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		$enter a dollar amount

(2) If manufacturing overhead is applied on the basis of direct labor cost, what overhead rate was used in each year? (Round answers to 0 decimal places, e.g. 55%.)

		Last year			Current year
Overhead rate		enter percentages rounded to 0 decimal places	%		enter percentages rounded to 0 decimal places	%

(b) Prepare summary entries at January 31 to record the current year’s transactions pertaining to Job No. 92. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 31	enter an account title to record raw materials used on January 31	enter a debit amount	enter a credit amount
	enter an account title to record raw materials used on January 31	enter a debit amount	enter a credit amount
	(To record raw materials used)
31	enter an account title to record factory labor used	enter a debit amount	enter a credit amount
	enter an account title to record factory labor used	enter a debit amount	enter a credit amount
	(To record factory labor used)
31	enter an account title to record manufacturing overhead	enter a debit amount	enter a credit amount
	enter an account title to record manufacturing overhead	enter a debit amount	enter a credit amount
	(To record manufacturing overhead)
31	enter an account title to record job completed	enter a debit amount	enter a credit amount
	enter an account title to record job completed	enter a debit amount	enter a credit amount
	(To record job completed)

Answer 1

Solution - 1 Calculation of Begining WIP

Particulars	Amount
Direct Materials	$15,300
Add- Direct Labour	$6,000
Add- Manufaturing Overhead	$4,200
Cost of Begining Work In Progress	$25,500

Balence In WIP Inventory on january 1 $ 25,500

Solution-2 Calculation Of Total Manufacturing Cost for the Current Year

Particulars	Manufacturing Cost	Labour coat
Incurred On January 12	$5,600	$7,000
Add- Incurred on January 27	$3,200	$4,000
Total Cost	$8,800	$11,000

Calculation of Overhead rate

Particulars	Working	Last Year	Current Year
Manufacturing Overhead Cost	(1)	$4,200	$8,800
Labour Cost	(2)	$6,000	$11,000
Overhead Rate	(3)=[(1)/(2)]*100	70%	80%

Sol (b)- Journal Entreis at January31 To job no.92

Account Titles and Explanation	Debit	Credit
Work in process inventory	$8,500		(6000+2500)
Raw materials inventory		$8,500
(To record raw materials used)
Work in process inventory	$11,000		(7,000+4,000)
Factory labor		$11,000
(To record factory labor used)
Work in process inventory	$8,800		(5,600+3,200)
Manufacturing overhead		$8,800
(To record manufacturing overhead)
Finished goods inventory	43,800
Work in process inventory		43,800
(To record job completed)