a.Record the journal entries for transactions 1-7.

b.As of the end of March, determine the total cost assigned to Jobs #2 and #3.

Public Building Solutions (PBS) builds portable buildings to clients' specifications.The firm has two departments:Parts Fabrication and Assembly.The Parts Fabrication Department designs and cuts the major components of the building and is highly automated. The Assembly Department assembles and installs the components and this department is highly labor intensive. The Assembly Department begins work on the buildings as soon as the floor components are available from the Parts Fabrication Department.

In its first month of operations (March), PBS obtained contracts for three buildings:

Job 1:a 20- by 40-foot storage building

Job 2: a 35- by 35-foot commercial building

Job 3:a 30- by 40-foot portable classroom

PBS bills its customers on a cost-plus bases, with profit set equal to 25% of costs.The firm uses a job order costing system based on normal costs.Overhead is applied in Parts Fabrication at a predetermined rate of $100 per machine hour (MH).In the Assembly Department, overhead is applied at a predetermined rate of $10 per direct labor hour (DLH).The following significant transactions occurred in March.

1.Direct material was purchased on account:$80,000

2.Direct material was issued to the Parts Fabrication Department for use in the three jobs:Job #1, $8,000; Job #2, $14,000; and Job #3, $45,000.Direct material was issued to the Assembly Department:Job #1, $500; Job #2, 1,200; and Job #3, $6,600.

3.Time sheets and payroll summaries indicated that the following direct labor costs were incurred:

Parts Fabrication Department

Assembly Department

Job #1

$1,000

$2,400

Job #2

3,000

3,500

Job #3

5,000

9,500

4.The following indirect costs were incurred in each department:

Parts Fabrication Department

Assembly Department

Labor

$4,200

$4,500

Utilities/Fuel

5,900

2,300

Depreciation

10,300

3,600

The labor and utilities/fuel costs were accrued at the time of the journal entry.

PBS uses a single Manufacturing Overhead Control Account for each department.

5.Overhead was applied based on the predetermined rates in effect in each department.The Parts Fabrication Department had 200 MHs (20 MHs on Job #1, 35 MHs on Job #2, and 145 MHs on Job #3), and the Assembly Department worked 950 DLHs (40 DLHs on Job #1, 110 DLHs on Job #2, and 800 DLHs on Job #3) for the month.

6.Job #1 was completed and sold for cash in the amount of the cost-plus contract.At month-end, Jobs #2 and #3 were only partially complete.For simplicity, move Job #1 out of both departments of WIP to FG in one entry.Do not worry about moving Jobs #2 and #3 between WIP departments.

7.Any underapplied or overapplied overhead at month-end is considered immaterial and is assigned to Cost of Goods Sold.