Question

Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 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, $7,900 of indirect materials and $13,200 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:
Job 301
direct material 10,900
Direct Labor 8,900
Factory Overhead 5785
Total 25,585
Job 302
Direct Material 18,300
Direct Labor 17,700
Factory Overhead 11,505
Total 47505
Job 303
Direct Materials 26,000
Direct Labor 16,000
Factory Overhead -
Job 304
Direct Material 13700
Direct Labor 12300
Factory Overhead -
Required:
Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.
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 301 and 302.

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

1. Work in progress Dr, $68,900

(10,900 + $18,300 + 26,000 + $13,700)

Factory overhead Dr, $7,900

     To Material $76,800

(Being direct and indirect material used is recorded)

2.  Work in progress Dr, $54,900

($8,900 + $17,700 + $16,000 + $12,300)

Factory overhead Dr, $13,200

     To Wages payable $68,100

(Being direct and indirect labor used is recorded)

3. Work in progress Dr, $39,259

      To Factory overhead $39,259

($54,900 × ($5,785 ÷ $8,090))

(Being factory over applied is recorded)

4. Finished goods Dr, $73,090

        To Work in progress $73,090

($25,585 + $47,505)

(Being Completion of Job 301 and Job 302 is recorded)