1.The weekly time tickets indicate the following distribution of labor hours for three direct labor employees:
| Hours | ||||
| Process | ||||
| Job 301 | Job 302 | Job 303 | Improvement | |
| Tom Couro | 10 | 15 | 13 | 2 |
| David Clancy | 12 | 12 | 14 | 2 |
| Jose Cano | 11 | 13 | 15 | 1 |
The direct labor rate earned per hour by the three employees is as follows:
| Tom Couro | $32 |
| David Clancy | 36 |
| Jose Cano | 28 |
The process improvement category includes training, quality improvement, and other indirect tasks.
| Answers | |
| A. | Journalize the entry on July 15 to record the factory labor costs for the week. (3 Journal Entries) |
| B. | Assume that Jobs 301 and 302 were completed but not sold during the week and that Job 303 remained incomplete at the end of the week. How would the direct labor costs for all three jobs be reflected on the financial statements at the end of the week? |
| Cost of Goods Sold | Work In Process | Finished Goods | Factoy Overhead | ||
| Job 301 | |||||
| Job 302 | |||||
| Job 303 |
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2.Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $8,000 of indirect materials and $12,400 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:
| Job 301 | |
| Direct materials | $10,000 |
| Direct labor | 8,000 |
| Factory overhead | 6,000 |
| Total | $24,000 |
| Job 302 | |
| Direct materials | $20,000 |
| Direct labor | 17,000 |
| Factory overhead | 12,750 |
| Total | $49,750 |
| Job 303 | |
| Direct materials | $24,000 |
| Direct labor | 18,000 |
| Factory overhead | — |
| Job 304 | |
| Direct materials | $14,000 |
| Direct labor | 12,000 |
| Factory overhead | — |
Required:
Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.
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3.Tybee Industries Inc. uses a job order cost system . The following data summarize the operations related to production for January 2016, the first month of operations:
| a. Materials purchased on account, $29,800. | ||
| b. Materials requisitioned and factory labor used: | ||
| Job | Materials | Factory Labor |
| 301 | $ 2,960 | $2,775 |
| 302 | 3,620 | 3,750 |
| 303 | 2,400 | 1,875 |
| 304 | 8,100 | 6,860 |
| 305 | 5,100 | 5,250 |
| 306 | 3,750 | 3,340 |
| For general factory use | 1,080 | 4,100 |
| c. Factory overhead costs incurred on account, $5,500. | |
| d. Depreciation of machinery and equipment, $1,980. | |
| e. The factory overhead rate is $54 per machine hour. Machine hours used: | |
| Job | Machine Hours |
| 301 | 25 |
| 302 | 36 |
| 303 | 30 |
| 304 | 72 |
| 305 | 40 |
| 306 | 25 |
| Total | 228 |
| f. Jobs completed: 301, 302, 303 and 305. | |||
| g. Jobs were shipped and customers were billed as follows: Job 301, $8,250; Job 302, $11,200; Job 303, $15,000. | |||
| Required: | |||
| A. | Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles. (18 journal entries) | ||
| B. | Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.
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| C. | Prepare a schedule of unfinished jobs to support the balance in the work in process account.* | ||
| D. | Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.*
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