Question

Waterways Problem 02 a-c Waterways has two major public-park projects to provide with comprehensive irrigation in one of its service locations this month. Job J57 and Job K52 involve 15 acres of landscaped terrain, which will require special-order, sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December. Raw materials were requisitioned from the company’s inventory on December 2 for $5,097; on December 8 for $1,065; and on December 14 for $3,462. In each instance, two-thirds (2/3) of these materials were for J57 and the rest for K52. Six time tickets were turned in for these two projects for a total amount of 18 hours of work. All the workers were paid $15 per hour. The time tickets were dated December 3, December 9, and December 15. On each of those days, 6 labor hours were spent on these jobs, two-thirds (2/3) for J57 and the rest for K52. The predetermined overhead rate is based on machine hours. The expected machine hour use for the year is 2,129 hours, and the anticipated overhead costs are $851,600 for the year. The machines were used by workers on projects K52 and J57 on December 3, 9, and 15. Six machine hours were used for project K52 (2 each day), and 8.5 machine hours were used for project J57 (2.5 the first day and 3 each of the other days). Both of these special orders were completed on December 15, producing 200 sprinkler heads for J57 and 100 sprinkler heads for K52. Additional job order activities during this period included: Dec. 1 Purchased raw materials from Durbin Supply Company on account for $53,000. Dec. 2 Issued $39,900 of direct materials from the company’s inventory to jobs other than K52 and J57 and $2,900 of indirect materials. Dec. 12 Paid Waterways’ factory salaries and wages for $65,500. Dec. 13 Paid the factory’s water bill of $9,000. Dec. 18 Transferred $50,300 of costs from other completed jobs to finished goods. Dec. 21 Paid the factory’s electric bill of $11,800 for Waterways’ factory. Dec. 31 Made adjusting entries forth factory that included accrued property taxes of $11,900, prepaid insurance of $8,900, and accumulated depreciation of $15,900.

Answer 1

12-Jan	Raw Materials Inventory	53,000
	Accounts Payable		53,000
	(Purchase of raw materials on account)
12-Feb	Work in Process Inventory	5,097
	Raw Materials Inventory		5,097
	(To assign materials to jobs J57 & K52)
12-Feb	Work in Process Inventory	39,900
	Manufacturing Overhead	2,900
	Raw Materials Inventory		42,800
	(To assign materials to jobs and overhead)
12-Mar	Work in Process Inventory	90
	Factory Labor		90
	(To assign labor to jobs J57 & K52)
12-Mar	Work in Process Inventory	1,800
	Manufacturing Overhead		1,800
	(To assign overhead to jobs J57 & K52)
12-Aug	Work in Process Inventory	1,065
	Raw Materials Inventory		1,065
	(To assign materials to jobs J57 & K52)
12-Sep	Work In Process Inventory	90
	Factory Labor		90
	(To assign labor to jobs J57 & K52)
12-Sep	Work in Process Inventory	2,000
	Manufacturing Overhead		2,000
	(To assign overhead to jobs J57 & K52)
12-Dec	Factory Labor	65,500
	Cash		65,500
	(To record factory labor costs and payment)
Dec-13	Manufacturing Overhead	9,000
	Cash		9,000
	(To record payment of factory water bill)
Dec-14	Work in Process Inventory	3,462
	Raw Materials Inventory		3,462
	(To assign materials to jobs J57 & K52)
Dec-15	Work In Process	90
	Factory Labor		90
	(To assign labor to jobs J57 & K52
Dec-15	Work in Process Inventory	2,000
	Manufacturing Overhead		2,000
	(To assign overhead to jobs J57 & K52)
Dec-15	Finished Goods Inventory	15,694
	Work in Process Inventory		15,694
	(To record completion of jobs J57 & K52)
Dec-18	Finished Goods Inventory	50,300
	Work in Process Inventory		50,300
	(To record completion of jobs)
Dec-21	Manufacturing Overhead	11,800
	Cash		11,800
	(To record payment of factory electric bill)
Dec-31	Manufacturing Overhead	36,700
	Property Taxes Payable		11,900
	Prepaid Insurance		8,900
	Accumulated Depreciation		15,900
	(To record overhead costs)
(c) 12/31	Cost of Goods Sold	3,500
	Manufacturing Overhead*		3,500
	(To transfer underapplied overhead to cost of goods sold)

D_ _ I _ I I_ JOB COST SHEET Job Number 357 Quantity 200 units Date Requested Dec 2 Date Completed Dec 15, 2012 Item special order parts Direct Materials Direct Labor Date Manufacturing Overhead Hours Rate Amount $ 3,398 $ 60 2.5 $ 400 $ 1,000 $ 710 02-Dec 03-Dec 08-Dec 09-Dec 14-Dec 15-Dec $ 60 3 $ 400 $ 1,200 $ 2,308 $ 60 $ 400 $ 1,200 Cost Summary Direct materials Direct labor Manufacturing overhead Total Cost Unit Cost $ $ $ $ $ 6,416.00 180.00 3,400.00 9,996.00 49.98 9996/200 III JOB COST SHEET Job Number K52 Quantity 100 units Date Requested Dec 2 Date Completed Dec 15, 2012 Item special order parts Direct Materials Direct 1 Labor Date Manufacturing Overhead Hours Rate Amount $1,699 $30 2 $ 400 $800 355 02-Dec 03-Dec 08-Dec 09-Dec 14-Dec 15-Dec 30 2 $ 400 $ 800 1,154 30 2 $ 400 $ 800 Cost Summary Direct materials Direct labor Manufacturing overhead Total Cost Unit Cost $ $ $ $ $ 3,208.00 90.00 2,400.00 5,698.00 56.98 5698/100

|RAW MAT Dec-02} Dec-08 Dec-14 0.67 |J57 |K52 5097| 3398 1699 106571ol 355 3462| 2308 1 154 Time tickes total hrs paid each day | 18 15 6 0.67 |J57 90| 90| 9o| Dec-03 Dec-09 Dec-15 |K52 6o| | 6o| 60 | 30. 30| 307 expected mhr toti oh rate 2129 851600 40o| J57 K52 Dec-03 2. 510002 800 Dec-09| 3l1200 2800 Dec- 153 12002 800 | |57 | | produce |K52 | 200, 100