3. Alfa Company uses a job-order costing system. Three jobs - job 1, job 2, and job 3- were manufactured during Sept. and Oct. 2029. Job I was completed on Sept. 20; the other two jobs were not finished on Oct. 31. Job cost sheets of the three jobs are given below: Job1 Job 2 Job3 Sept. costs incurred: D/M D/L M/O Oct. costs incurred: D/M D/L M/O $ 19,000 $ 16,000 $ 22,400 S 10.200 S 6,000 $4,200 $ 8,000 ? S 12,000 $15,000 ? $ 14,400 $ 17,000 ? *Jobs 2 and 3 were started during Sept. The following additional information is available: a. Manufacturing overhead is assigned to jobs on a basis of direct labor cost. b. Balances in the inventory accounts at Sept. 30 were: Raw Material $ 60,000 $ 100,000 ? WIP Fin. Goods Required: 1. Prepare T-accounts for Raw Materials, Work in Process, Finished Goods and Manufacturing Overhead. Enter the Sept. 30 balances given above; in the case of Work in Process, compute the Sept. 30 balance and enter it into the Work in Process T-account. 2. Prepare journal entries for October as follows: a) Prepare an entry to record the issue of materials into production, and post the entry to appropriate T- accounts. Indirect materials used during Oct. totaled $7,200 b) Prepare an entry to record the incurrence of labor cost, and post the entry to appropriate T-accounts. Indirect labor cost totaled $14,000 for Oct. c) Prepare an entry to record the incurrence of $38,800 in various actual manufacturing overhead costs for Oct. (Credit Accounts Payable.) 3. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Using this rate prepare a journal entry to record the application of overhead cost to jobs for Oct. Post this entry to appropriate T-accounts. 4. As stated earlier, job I was completed during Oct. Prepare a journal entry to show the transfer of this job off of the production line and into the finished goods warehouse, Post the entry to appropriate T-accounts. 5. Determine the balance at Oct. 31 in the Work in Process inventory account. How much of this balance consists of costs traceable to job 2? To job 32 3. Alfa Company uses a job-order costing system. Three jobs - job 1, job 2, and job 3- were manufactured during Sept. and Oct. 2029. Job I was completed on Sept. 20; the other two jobs were not finished on Oct. 31. Job cost sheets of the three jobs are given below: Job1 Job 2 Job3 Sept. costs incurred: D/M D/L M/O Oct. costs incurred: D/M D/L M/O $ 19,000 $ 16,000 $ 22,400 S 10.200 S 6,000 $4,200 $ 8,000 ? S 12,000 $15,000 ? $ 14,400 $ 17,000 ? *Jobs 2 and 3 were started during Sept. The following additional information is available: a. Manufacturing overhead is assigned to jobs on a basis of direct labor cost. b. Balances in the inventory accounts at Sept. 30 were: Raw Material $ 60,000 $ 100,000 ? WIP Fin. Goods Required: 1. Prepare T-accounts for Raw Materials, Work in Process, Finished Goods and Manufacturing Overhead. Enter the Sept. 30 balances given above; in the case of Work in Process, compute the Sept. 30 balance and enter it into the Work in Process T-account. 2. Prepare journal entries for October as follows: a) Prepare an entry to record the issue of materials into production, and post the entry to appropriate T- accounts. Indirect materials used during Oct. totaled $7,200 b) Prepare an entry to record the incurrence of labor cost, and post the entry to appropriate T-accounts. Indirect labor cost totaled $14,000 for Oct. c) Prepare an entry to record the incurrence of $38,800 in various actual manufacturing overhead costs for Oct. (Credit Accounts Payable.) 3. What apparent predetermined overhead rate does the company use to assign overhead cost to jobs? Using this rate prepare a journal entry to record the application of overhead cost to jobs for Oct. Post this entry to appropriate T-accounts. 4. As stated earlier, job I was completed during Oct. Prepare a journal entry to show the transfer of this job off of the production line and into the finished goods warehouse, Post the entry to appropriate T-accounts. 5. Determine the balance at Oct. 31 in the Work in Process inventory account. How much of this balance consists of costs traceable to job 2? To job 32
