Job Order Costing

John and Sam went to college together, and both majored in computer science. A few years ago, they formed a computer company called Synergy, Inc. Synergy Inc. is a manufacturer of enterprise management systems. Assume that the company has a division that does custom jobs for large clients.

Production costs are accounted for using a job cost system. Suppose that at the beginning of the month, raw materials inventory totaled $8,000, manufacturing supplies amounted to $1,800, and two jobs were in process Job 355 with assigned costs of $18,750 and Job 356 with assigned costs of $2,800, and there were no finished goods inventories. There was no under-applied or over-applied manufacturing overhead on the first day of the month.

The following information summarized the months manufacturing activities:

Synergy purchased raw material costing $50,000 on account. Synergy purchased manufacturing supplies costing $9,000. The manager process requisitioned materials for the various jobs in process. The requisitioned material needed to complete Job 356 was $5,200. Synergy started two new jobs and assigned those numbers 357 and 358. The requisitioned direct materials for 357 was $19,000, and 358 was $15,500.

Direct labor costs for the month were incurred at a rate of $20.00 per hour. Job 355 needed 600 hours. Job 356 needed 1,600 hours. Job 357 needed 2,100 hours. Job 358 needed 900 hours.

Manufacturing supplies used for the month totaled $6,500. Synergy recognized depreciation on factory assets of $5,000. The company incurred a miscellaneous manufacturing overhead cost of $22,750 on account. The company applied manufacturing overhead at a rate of $8.00 per direct labor hour. The following jobs were completed in the month: Jobs 355, 356, and 357. The following jobs were delivered to customers: Jobs 355 and 356.

1. Prepare in good form a ledger or T account showing the flow of costs through the Work-in-Process, Finished Goods, and Costs of Goods Sold accounts.

2. Show the job costs details for each job to support the balances in Work-in-Process, Finished Goods, and Costs of Goods Sold accounts.