Yurman Inc. uses a job-order costing system. During the month of May, the following transactions occurred — job-order — Purchased materials account for 670

Yurman Inc. uses a job-order costing system. During the month of May, the following transactions occurred:

a. Purchased materials on account for $29,670.

b. Requisitioned materials totaling $24,500 for use in production. Of the total, $9,200 was for Job 58, $8,900 for Job 59, and the remainder for Job 60.

c. Incurred direct labor for the month of $32,400, with an average wage of $18 per hour. Job58 used 800 hours; Job 59, 600 hours; and Job 60, 400 hours.

d. Incurred and paid actual overhead of $17,880 (credit Various Payables).

e. Charged overhead to production at the rate of $4.80 per direct labor hour.

f. Completed and transferred Jobs 58 and 59 to Finished Goods.

g. Sold Job 57 (see beginning balance of Finished Goods) and Job 58 to their respective clients on account for a price of cost plus 40%.

Beginning balances as of May 1 were:

Materials …………………..$ 2,300

Work in Process ………………….0

Finished Goods (Job 57) …...25,600

Required:

1. Prepare the journal entries for Transactions a through g.

2. Prepare brief job-order cost sheets for Jobs 58, 59, and 60.

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3. Calculate the ending balance of Raw Materials.

4. Calculate the ending balance of Work in Process.

5. Calculate the ending balance of Finished Goods

SOLUTION

1			Journal	Journal
a.	Date	Date	Account & Explanation	Account & Explanation	Account & Explanation			Debit	Debit	Credit
a.
a.			Raw Materials	Raw Materials				29,670	29,670
			Accounts Payable	Accounts Payable						29,670
b.
b.			Work in Process	Work in Process				24,500	24,500
			Raw Materials	Raw Materials						24,500
c.
c.			Work in Process	Work in Process				32,400	32,400
			Wages Payable	Wages Payable						32,400
d.
d.			Overhead Control	Overhead Control				17,880	17,880
			Various Payables	Various Payables						17,880
e.
e.			Work in Process	Work in Process				8,640	8,640
			Overhead Control	Overhead Control						8,640
			Total Direct Labor Hours = $32,400/$18 = 1,800 DLH	Total Direct Labor Hours = $32,400/$18 = 1,800 DLH	Total Direct Labor Hours = $32,400/$18 = 1,800 DLH	Total Direct Labor Hours = $32,400/$18 = 1,800 DLH	Total Direct Labor Hours = $32,400/$18 = 1,800 DLH
			Applied Overhead = 1,800 DLH × $4.80 = $8,640	Applied Overhead = 1,800 DLH × $4.80 = $8,640	Applied Overhead = 1,800 DLH × $4.80 = $8,640	Applied Overhead = 1,800 DLH × $4.80 = $8,640	Applied Overhead = 1,800 DLH × $4.80 = $8,640
f.
f.			Finished Goods	Finished Goods				50,020	50,020
			Work in Process	Work in Process						50,020
g.
g.			Cost of Goods Sold	Cost of Goods Sold				53,040	53,040
			Finished Goods	Finished Goods						53,040
			Accounts Receivable	Accounts Receivable				74,256	74,256
			Sales Revenue	Sales Revenue						74,256

				Job 58	Job 58		Job 59		Job 60
Direct materials…………………………...…	Direct materials…………………………...…	Direct materials…………………………...…	Direct materials…………………………...…	$ 9,200	$ 9,200	$ 8,900	$ 8,900	$ 6,400	$ 6,400
Direct labor…………………………………….	Direct labor…………………………………….	Direct labor…………………………………….	Direct labor…………………………………….		14,400	10,800	10,800	7,200	7,200
Applied overhead……………………………	Applied overhead……………………………	Applied overhead……………………………	Applied overhead……………………………		3,840	2,880	2,880	1,920	1,920
Total cost……………………………………	Total cost……………………………………	Total cost……………………………………		$27,440	$27,440		$22,580	$15,520	$15,520

Raw Materials:	Raw Materials:	Raw Materials:	Raw Materials:
Beginning balance……………………………	Beginning balance……………………………	Beginning balance……………………………	Beginning balance……………………………	$	2,300
Purchases……………………………………...	Purchases……………………………………...	Purchases……………………………………...	Purchases……………………………………...		29,670
Direct materials……………………………….	Direct materials……………………………….	Direct materials……………………………….	Direct materials……………………………….		(24,500)
Ending balance……………………………	Ending balance……………………………	Ending balance……………………………		$	7,470

4.	Work in Process:
	Beginning balance……………………………………………		$	$	0
	Direct materials………………………………………………				24,500
	Direct labor…………………………………………………				32,400
	Applied overhead……………………………………………				8,640
	Jobs completed:
	Job 58……………………………………………………	$27,440
	Job 59……………………………………………..………	22,580			(50,020)
	Ending balance………………………………………………			$	15,520
5.	Finished Goods:
Beginning balance……………………………………………		$25,600

Jobs transferred in:

Job 58……………………………………………….……… $27,440

Job 59……………………………………………………… 22,580 50,020

Jobs sold:

Job 57……………………………………………………… $25,600

Job 58……………………………………………….……… 27,440 $(53,040)

Ending balance………………………………………………… $ 22,580