Problem 19-4A (Algo) Preparing job cost sheets, recording costs, preparing inventory ledger accounts LO P1, P2, P3

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Watercrafts predetermined overhead rate is 200% of direct labor. Information on the companys production activities during May follows.

1. Purchased raw materials on credit, $260,000.

2. Materials requisitions record use of the following materials for the month.

   Job 136	$ 49,000
   Job 137	32,500
   Job 138	19,200
   Job 139	22,800
   Job 140	7,000
   Total direct materials	130,500
   Indirect materials	20,500
   Total materials requisitions	$ 151,000

3. Time tickets record use of the following labor for the month. These wages were paid in cash.

   Job 136	$ 12,000
   Job 137	10,600
   Job 138	37,500
   Job 139	39,400
   Job 140	3,600
   Total direct labor	103,100
   Indirect labor	25,500
   Total labor cost	$ 128,600

4. Applied overhead to Jobs 136, 138, and 139.
5. Transferred Jobs 136, 138, and 139 to Finished Goods Inventory.
6. Sold Jobs 136 and 138 on credit at a total price of $535,000.
7. Recorded the cost of goods sold for Jobs 136 and 138.

8. Incurred the following actual other overhead costs during the month.

   Depreciation of factory building	$ 68,000
   Depreciation of factory equipment	38,500
   Expired factory insurance	11,000
   Accrued property taxes payable	36,000

9. Applied overhead at month-end to the Work in Process Inventory account (for Job 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Problem 19-4A (Algo) Part 4

4.

(a) Compute the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventory account balance.

(b) Compute the total cost of each job finished but not sold, and prove that the sum of their costs equals the Finished Goods Inventory balance.

(c) Compute the total cost of each job sold, and prove that the sum of their costs equals the Cost of Goods Sold balance.