Question 1

Cost of Materials Issuances Under the FIFO Method

An incomplete subsidiary ledger of materials inventory for May is as follows:

a. Complete the materials issuances and balances for the materials subsidiary ledger under FIFO.

Received				Issued				Balance
Receiving Report Number	Quantity	Unit Price		Materials Requisition Number	Quantity	Amount		Date	Quantity	Unit price	Amount
								May 1	380	$6	$2,280
23	270	$8						May 4
				104	430	$.......		May 10
29	180	10						May 21
				117	250	..		May 27

b. Determine the materials inventory balance at the end of May. $-----------------

c. Journalize the summary entry to transfer materials to work in process.

Work in process -----------

Materials ------------------

_____________________________________________________

Question2

Job Order Cost Accounting for a Service Company

The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 60% of media purchases.

On August 1, the four advertising projects had the following accumulated costs:

	August 1 Balances
Vault Bank	$68,200
Take Off Airlines	20,500
Sleepy Tired Hotels	47,700
Tastee Beverages	29,300
Total	$165,700

During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:

	Direct Labor		Media Purchases
Vault Bank	$48,300		$182,500
Take Off Airlines	21,600		160,600
Sleepy Tired Hotels	94,900		117,300
Tastee Beverages	108,000		87,600
Total	$272,800		$548,000

At the end of August, both the Vault Bank and Take Off Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account.

a. Journalize the summary entry to record the direct labor costs for the month.

a.	Work in Process
	Salaries Payable

b. Journalize the summary entry to record the media purchases for the month.

b.	Work in Process
	Accounts Payable

c. Journalize the summary entry to record the overhead applied for the month.

c.	Work in Process
	Agency Overhead

d. Journalize the summary entry to record the completion of Vault Bank and Take Off Airlines for the month.

d.	Cost of Services ..
	Work in Process ..