Giovanni Lofaro is a contractor specializing in custom-built Jacuzzis. On May 1, 2016, his ledger contains the following data:

Raw Materials Inventory ......................... $30,000

Work in Process Inventory ....................... 12,200

Manufacturing Overhead ...................... 2,500 (dr.)

The Manufacturing Overhead account has debit totals of $12,500 and credit totals of $10,000. Subsidiary data for Work in Process Inventory on May 1 include the following:

During May, the following costs were incurred:
(1) Raw materials purchased on account $4,000,
(2) Labour paid $7,600, and
(3) Manufacturing overhead paid $1,400.
A summary of materials requisition slips and time tickets for the month of May reveals the following:

Overhead was charged to jobs on the basis of $0.70 per dollar of direct labour cost. The Jacuzzis for customers Looper, Zammit, and Ingle were completed during May. Each Jacuzzi was sold for $12,000 cash.
Instructions
(a) Prepare journal entries for the May transactions:
1. The purchase of raw materials, factory labour costs incurred, and manufacturing overhead costs incurred
2. Assignment of direct materials, labour, and overhead to production 3. 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 May.

Transcribed Image Text:

Direct Direct Labour $2,000 1,200 800 $4,000 Job by CustomerMaterials Looper Zammit Ingle $2,500 2,000 900 $5,400 Manufacturing Overhead $1,400 840 560 $2,800 ob Cost Sheets Materials Requisition Sli Job by Customer Looper Zammit Ingle Gao $500 600 2,300 1,900 5,300 1,500 $6,800 Time Tickets $ 400 1,000 1,300 2,900 5,600 2,000 $7,600 General use