Problem 2-3

Smith Die Company manufactures cutting dies for the shoe industry. Each set of dies is custom designed to a customers 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 $6,300. The company received and paid for supplies (indirect materials) from Mallard Supply costing $2,500. Material requisitions indicated that materials were issued to the factory floor as follows:

Job No.

Direct Materials

Indirect Materials

1005

$

650

1006

1,050

1007

1,600

1008

800

1009

470

1010

330

Totals

$

4,900

$

1,400

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

Job No.		Direct Labor			Indirect Labor
1005		$	1,300
1006			2,300
1007			3,500
1008			1,600
1009			880
1010			640
Totals		$	10,220		$	6,000

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 120 percent of total job cost. Calculate the total cost of each job. Prepare journal entries to record the above information