Job Order Cost Accounting

Unitas Manufacturing uses a job order cost accounting system. On May 1, the company has a balance in Work in Process Inventory of $5,500 and two jobs in process: Job No. 429, $3,000 and Job No. 430, $2,500. During May, a summary of source documents reveals the following:

For Materials Requisition Slips Labor Time Tickets

Job No. 429 $3500 $4400

Job No. 430 2600 3400

Job No. 431 3400 4200

Job No. 432 3000 4000

General Use 1000 1500

$13500 $17500

Unitas Manufacturing applies manufacturing overhead to jobs at an overhead rate of 70% of direct labor cost. Job No. 429 is completed during the month.

Instructions

(a) Prepare Journal entries to record the requisition slips, time tickets, the assignment of manufacturing overhead jobs, and the completion of Job No. 429. Show computations.

(Only Journalize Job No. 429)

(b) Answer the following questions.

1. What is the balance in Work in Process Inventory at May 31?

2. If Unitas Manufacturing incurred $8000 of manufacturing overhead in addition to indirect materials and indirect labor, was overhead over- or underapplied in May and by how much?