THIS is your "Bob - Homework" Exercise 16-2 & Prob 16-1B. This problem is NOT in your textbook. Required: below this problem B (next page) are the working papers for you to complete and then submit to the instructor ... by the due date. Optional: Below the Prob B "working papers" (scroll 3 pages) are answers to similar, Prob A. If needed, refer to the Prob A to help you complete your problem B assignment. E16-2 Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,500 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,500. During May, a summary of source documents reveals the following. Materials Labor Job Number Requisition Slips Time Tickets 429 $2,500 $1,900 430 3,500 3,000 4,400 $10,400 7,600 $12,500 $11.200 $13,700 Stine Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Job No. 429 is completed during the month. Instructions (a) Prepare summary journal entries to record (1) the requisition slips, (2) the time tickets, (3) the assignment of manufacturing overhead to jobs, and (4) the completion of Job No. 429. Instructors Note: Beginning WIP (Work-In-Process) has $3,500 composed of amounts already transferred in for jobs 429 and 430 as stated in the problem (FYI: The 3,500 under Job 430 in Materials Requisition is NOT the same 3,500 that is in WIP - they are different 2 different things) Instruction (a) needs an entry transferring the TOTAL of 10,400 (the "summary of the job costs) "from" ("out of) RAW MAT INV to WIP Hence PART of the first entry increases the asset WIP and decreases the asset RAW MAT INV by $10.400. (How do you know to debit WIP? ... The three job costs being transferred, totalling $10,400 are Direct Materials - since they are associated with a specific job #... Indirect costs are not associated with any specific job #. They are considered "factory-wide" use or "general use. The other part of the first entry involves increasing the asset MFG OH (manufacturing overhead) by the "general use" materials. Therefore, debit the asset MFG OH (a control account) and decrease the asset RAW MAT by another $800. (Your credit amount should be the total of both debits.) Materials Labor head Over head Over P16-1B Pedriani Company uses a job order cost system and applies overhead on the basis of direct labor hours. On Jan01, 2017. Job No. 25 was the only job in process. Costs incurred prior to Jan01 on this job were as follows: direct materials $10,000, direct labor $6,000, and manufacturing overhead $9,000. Job No 23 had been completed at a cost of $42,000 and was part of finished goods inventory. There was a $5,000 balance in the Raw Materials Inventory account During the month of January, the company began production on Jobs 26 and 27 and completed Jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for $63,000 and $74,000, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $45,000 on account 2. Incurred factory labor costs of $33,500. Of this amount, $7,500 related to employer payroll taxes. 3. Incurred manufacturing overhead costs: indirect materials $10,000; indirect labor $9,500; deprec. expense on equipment $12,000; and various other manufacturing overhead costs on account $11,000. 4. Assigned direct materials and direct labor to jobs as follows. Job Direct Direct No. Materials Labor 25 $5,000 $3,000 26 17,000 12,000 27 13,000 9,000 5. Company uses direct labor hours as the activity base to assign overhead. Direct labor hours incurred on each job were: Job #25, 200; Job 526, 800; and Job #27, 600. Iristructions (a) Calculate the predetermined overhead rate for the year 2017, assuming Company estimates foral manufacturing overhead costs of $440,000, and direct labor hours of 20,000 for the year. (Your answer should be an amount "per direct labor hour fby Open Job cost sheets for Jobs 25, 26, and 27.-Enter the January + balances on the job cost sheet for Job No. 25 (Completed for you) (c) Prepare entries to record: purchase of raw materials, factory labor costs incurred, and the manufacturing overhead costs incurred during the month of JAN. (d) Prepare entries to record the assignment of direct materials, direct labor, and mig overhead costs to production. (In assigning overhead, use the rate calculated in "a"). Past all costs to the job cost sheets as necessary (e) Total the job cost sheets for any job(s) completed during the month. Prepare the entry for entries) to record the completion of any job(s) during JAN. Prepare journal entry for entries) to record the sale of any job(s) during JAN. (g) What is the balance in the Work in Process Inventory account at the end of JAN? (h) What is the amount of over- or underapplied overhead? PROBLEM 16-1B... Working Papers (a) (b) See solution to part (e) for job cost sheets (c) Labor Mfg Overhead (d) More Below (e) Job #25 Date Direct Materiale 10,000 Direct Labor 6,000 Manufacturing Overhead 9,000 Beg Total Total Cost of Job Job # 26 Date Direct Materials Direct Labor Manufacturing Overhead Beg Jan Total Total Cost of Job Job # 27 Date Direct Materials Direct Labor Manufacturing Overhead Beg Jan *$22 x 600 dir ibr hr (e) continued... Journal entry for completion of jobs in JAN (0) More Below (9) (Taccount) Work in Process (Taccount) Beginning balance Direct materials Direct labor Manufacturing overhead Cost of completed jobs 25 and 26 Ending balance The balance in this account consists of the current costs assigned to Job No 27 Direct Materials $13,000 Direct Labor 9,000 Manufacturing Overhead 13.200 Total costs assigned ... $35.200 (h) un) Manufacturing Overhead Actuel Applied (debit) (credit Bal (Indicate either underapplied" or "overapplied" below) The balance in the Manufacturing Overhead account is: underapplied or overapplied. (Indicate one or the other