Question
A welding company specializes in custom steel frames and uses job costing to account for its operations. The following information is available as of May
A welding company specializes in custom steel frames and uses job costing to account for its operations. The following information is available as of May 1 for the work-in-process inventory account:
| Job# | Direct Materials | Direct Labor | Man. Overhead | Total Cost |
|---|---|---|---|---|
| 304 | $3,000 | $1,800 | $2,520 | $7,320 |
| 306 | 4,000 | 2,100 | 2,940 | 9,040 |
| Total Cost | 7,000 | 3,900 | 5,460 | 16,360 |
Welding Company pays an hourly rate of $15 for direct labor. Manufacturing overhead costsare applied to jobs based on the direct labor hours used. During the month of May, Jacob Welding spends $5,800 to purchase materials and $4,650 for manufacturing overhead. The operations in May are summarized below.
| Job# | Material Requisition summary | Time Card Summary (Hours |
|---|---|---|
| 304 | $1,100 | 40 |
| 306 | 900 | 30 |
| 307 | 2,800 | 110 |
| 308 | 750 | 25 |
| Total | 5,550 | 205 |
Jobs 304, 306, 307 are completed in May but only Jobs 304 and 307 are delivered to customers.
Question: Prepare the necessary journal entries for May (assuming any over or underapplied manufacturing overhead is written off to cost of goods sold account monthly).
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Financial Development Institutions Growth And Poverty Reduction
Authors: Basudeb Guha Khasnobis, George Mavrotas
2008 Edition
0230201776, 978-0230201774
