Sager Company builds custom retaining walls for large commercial customers. On May 1, the company had no inventories of work in process or finished goods but held the following raw materials.

Cinder block	200 units @ $250 =	$ 50,000
Boulders	95 units @ 180 =	17,100
Stain (indirect materials)	55 units @ 75 =	4,125
Total		$ 71,225

On May 4, the company began work on Job 102 for Woz Company and Job 103 for Reuben Company.

Required:

Prepare job cost sheets for Jobs 102 and 103. Prepare three materials ledger cards for cinder blocks, boulders, and stain. Enter the beginning raw materials inventory amounts from above for each of these materials on their ledger cards. Then, follow the instructions in this list of activities to complete the job cost sheets and the materials ledger cards.

Purchased raw materials on credit and recorded the following information from receiving reports.

Receiving Report Number 426, cinder blocks, 250 units at $250 each. Receiving Report Number 427, boulders, 90 units at $180 each.

Instructions: Enter the receiving report information on the materials ledger cards.b. Requisitioned the following raw materials for production.

Requisition Number 35, for Job 102, 135 units of cinder blocks

Requisition Number 36, for Job 102, 72 units of boulders.

Requisition Number 37, for Job 103, 70 units of cinder blocks.

Requisition Number 38, for Job 103, 38 units of boulders.

Requisition Number 39, for 15 units of stain.

Instructions: Enter amounts for direct materials requisitions on the materials ledger cards and the job cost sheets. Enter the indirect materials amount on the materials ledger card.

Received the following employee time tickets for work in May.

Time tickets Numbers 1 to 10 for direct labor on Job 102, $90,000.

Time tickets Numbers 11 to 30 for direct labor on Job 103, $65,000.

Time tickets Numbers 31 to 36 for indirect labor, $19,250.

Instructions: Record direct labor from the time tickets on the job cost sheets.

Finished Job 102. The company applies overhead to each job with a predetermined overhead rate of 80% of direct labor cost.

Instructions: Enter the applied overhead on the cost sheet for Job 102, fill in the cost summary section of the cost sheet, and then mark the cost sheet Finished.

Applied overhead cost to Job 103 based on the jobs direct labor used to date.

Instructions: Enter applied overhead on the job cost sheet for Job 103.

1. Job 102 was sold on credit for $400,000. Compute gross profit for the month.
2. Determine the balances reported on the month-end balance sheet for Raw Materials Inventory and Work in Process Inventory.