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. $75,100 in raw materials were purchased for cash.
2. $71,400 in raw materials were used in production. Of this amount, $65,700 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $151,000 were incurred and paid. Of this amount, $134,800 was for direct labor and the remainder was for indirect labor.
4. Additional manufacturing overhead costs of $125,800 were incurred and paid.
5. Manufacturing overhead of $119,700 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.
2. Determine the adjusted cost of goods sold for the period.

Answer 1

T-Accounts

Raw Materials					Factory Payroll					Manufacturing OH
To Cash	$    75,100.00	By WIP	$    65,700.00		To Cash	$ 151,000.00	By WIP	$ 134,800.00		To R.M	$      5,700.00	By WIP	$ 119,700.00
		BY M. OH	$      5,700.00				BY M. OH	$    16,200.00		To F.P.R	$    16,200.00	By COGS	$    28,000.00
		By End. Bal	$      3,700.00			$ 151,000.00		$ 151,000.00		To Cash	$ 125,800.00
	$   75,100.00		$   75,100.00								$ 147,700.00		$ 147,700.00
Work in Process					Finished Goods					Cost of Goods Sold
To R.M	$    65,700.00	By F.G	$ 320,200.00		To WIP	$ 320,200.00	By COGS	$ 320,200.00		To F.G	$ 320,200.00	By I.S	$ 348,200.00
To F.P.R	$ 134,800.00					$ 320,200.00		$ 320,200.00		TO M.OH	$    28,000.00
To M. OH	$ 119,700.00										$ 348,200.00		$ 348,200.00
	$ 320,200.00		$ 320,200.00

Manufacturing OH actually incurred				$ 147,700.00
Manufacturing OH applied				$ 119,700.00
Underapplied OH				$   28,000.00

	Unadjusted COGS				$ 320,200.00
Add:	Underapplied OH				$   28,000.00
	Adjusted COGS				$ 348,200.00

Abbreviations used:

R.M = Raw Materials

F.P.R = Factory Payroll

M. OH = Manufacturing Overhead

W.I.P = Work in Process

F.G = Finished Goods

COGS = Cost of Goods Sold