Using this document. Assume that in addition to indirect materials and indirect labor, factory overhead of $3,700 was incurred during Jan.

Law Publishing Inc. began printing operations on January 1. Jobs 401 and 402 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 403 and 404 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $ 2,000 of indirect materials and $ 9,000 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: .:. Journalize the summary entry to record each of the following operations for January (one entry for each operation): a. Direct and indirect materials used. b. Direct and indirect labor used. c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). d. Completion of Jobs 401 and 402. SOLUTION: a. b. c. Work in Process Factory Overhead Materials 25,990 2,000 Work in Process Factory Overhead Wages Payable 10,200 9,000 Work in Process Factory Overhead 27,990 19,200 7,140 7,140 Predetermined overhead rate: Job 401: $2,240 $3,200 = 70% or Job 402: $2,100 $3,000 = 70% Direct labor cost Predetermined factory overhead rate: $10,200 70% = $7,140 d. Finished Goods* Work in Process * $13,680 + $8,900 22,580 22,580