Giovanni Lofaro is a contractor specializing in custom-built Jacuzzis. On May 1, 2022, his ledger contains the following data: 

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,

(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:

Raw Materials Inventory Work in Process Inventory Manufacturing Overhead $30,000 12,200 2,500 (dr.)