Stellar Inc. is a construction company
specializing in custom patios. The patios are constructed of concrete, brick,
fiberglass, and lumber, depending upon customer preference. On June 1, 2012,
the general ledger for Stellar Inc. contains the following data.
Raw Materials Inventory $4,200
Work in Process Inventory $5,540
Manufacturing Overhead Applied $32,640
Manufacturing Overhead Incurred $31,650
Subsidiary data for Work in Process
Inventory on June 1 are as follows.
Job cost sheet
Customer Job
Cost
Element Gannon Rosenthal Linton
Direct Material $600 800 900
Direct Labor 320 540 580
Manufacturing Overhead 400 675 725
$1,320 $2,015 $2,205
.:.
During June, raw materials purchased
on account were $4,900, and all wages were paid. Additional overhead costs
consisted of depreciation on equipment $700 and miscellaneous costs of $400
incurred on account.
A summary of materials requisition
slips and time tickets for June shows the following.
Customer
Job Material Requisition Slip Time tickets
Gannon $800 $450
Koss 2000 800
Rosenthal 500 360
Linton 1300 1200
Gannon 300 390
4900 3200
General Use 1500 1200
6400 4400
:.
Overhead was charged to jobs at the
same rate of $1.25 per dollar of direct labor cost. The patios for customers
Gannon, Rosenthal, and Linton were completed during June and sold for a total
of $18,900. Each customer paid in full.
Instructions
(a) Journalize the June transactions:
(i) For purchase of raw materials,
factory labor costs incurred, and manufacturing overhead costs incurred;
(ii) Assignment of direct materials, labor,
and overhead to production; and
(iii) Completion of jobs and sale of
goods.
(b) Post the entries to Work in
Process Inventory.
(c) Reconcile the balance in Work in
Process Inventory with the costs of unfinished jobs.
(d) Prepare a cost of goods
manufactured schedule for June.
(a)
(i) Raw Materials Inventory.................................................................... 4,900
Accounts Payable.................................................................... 4,900
Factory Labor....................................................................................... 4,400
Cash........................................................................................... 4,400
Manufacturing Overhead.................................................................. 1,100
Accumulated
Depreciation—Equipment.............................. 700
Accounts Payable.................................................................... 400
(ii) Work in Process Inventory................................................................ 4,900
Manufacturing Overhead.................................................................. 1,500
Raw Materials Inventory.......................................................... 6,400
Work in Process Inventory................................................................ 3,200
Manufacturing Overhead.................................................................. 1,200
Factory Labor............................................................................. 4,400
Work in Process Inventory ($3,200 X
1.25).................................... 4,000
Manufacturing Overhead........................................................ 4,000
(iii) Finished Goods Inventory................................................................. 13,840
Work in Process Inventory...................................................... 13,840
|
Job
|
|
Direct
Materials
|
|
Direct
Labor
|
|
Manufacturing
Overhead*
|
|
Total
Costs
|
|
|
|
|
|
|
|
|
|
|
|
Gannon
Rosenthal
Linton
|
|
$1,700
1,300
2,200
|
|
$1,160
900
1,780
|
|
$1,450
1,125
2,225
|
|
$ 4,310
3,325
6,205
$13,840
|
*125% X direct labor amount
Cash 18,900
Sales........................................................................................... 18,900
Cost of Goods Sold............................................................................ 13,840
Finished Goods Inventory....................................................... 13,840
(b)
|
Work in Process Inventory
|
|
|
6/1 Balance 5,540
Direct
materials 4,900
Direct
labor 3,200
Overhead
applied 4,000
|
June Completed
work 13,840
|
|
6/30 Balance 3,800
|
|
(c) Work in Process Inventory................................................................................................ $3,800
Job:
Koss (Direct materials $2,000 + Direct labor $800 +
Manufacturing overhead
$1,000)................................................................... $3,800
(d) STELLAR INC.
Cost
of Goods Manufactured Schedule
For
the Month Ended June 30, 2012
Work in process, June 1.................................................................. $ 5,540
Direct materials used........................................................................ $4,900
Direct labor......................................................................................... 3,200
Manufacturing overhead applied...................................................
4,000
Total manufacturing costs..................................................... 12,100
Total cost of work in process........................................................... 17,640
Less:
Work in process, June 30.................................................... 3,800
Cost of goods manufactured.......................................................... $13,840
