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Die Company manufactures cutting dies for the shoe industry. Each set of dies is custom designed to a customer's templates. During the first week of

Die Company manufactures cutting dies for the shoe industry. Each set of dies is custom designed to a customer's templates. During the first week of May, six orders were received from customers. They were assigned job numbers 1005 to 1010. The following transactions occurred during the first week of May:

  • Smith Die purchased steel on account from Eastern City Steel costing $5,500. The steel is the major type of material used in manufacturing the dies.
  • The company received and paid for supplies (indirect materials) from Mallard Supply costing $2,400.

Material requisitions indicated that materials were issued to the factory floor as follows:

Job No. Direct Materials Indirect Materials

1005 $650

1006 $ 850

1007 $1,550

1008 $ 650

1009 $ 450

1010 $ 350

Totals $4,500 $1,000

The labor time ticket summary reflected the following costs for the week:

Job No. Direct Labor Indirect Labor

1005 $1,600

1006 $2,000

1007 $3,300

1008 $1,400

1009 $ 900

1010 $ 700

Totals $9,900 $6,500

  • Overhead was applied to all jobs in process at 180 percent of direct labor cost.
  • Jobs 1005, 1006, 1007, and 1008 were completed and transferred to finished goods.
  • Jobs 1009 and 1010 were still in process at the end of the week.
  • Jobs 1005, 1006, 1007, and 1008 were shipped to customers and billed at 150 percent of total job cost.
  1. Calculate the total cost of each job. Show all items and calculations. Set it up as a table with the Job numbers across the from left to right as the top of columns and the different manufacturing costs on the left in different rows, i.e.:

Job 1005

Job 1006

Etc.

Direct materials

$ xxx

Etc.

Etc.

Total cost per Job

  1. Prepare journal entries to record the above information. Use May 7 as the date for each journal entry. Skip a row after each complete entry. Show all calculations. For example:

May 7 Raw materials inventory xxx

Accounts payable xxx

May 7 Second entry xxx

Second entry xxx

  1. Calculate the ending balance of Work-in-Process Inventory. Show the calculation.

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