Job cost sheets for Howard Manufacturing are as follows: Instructions
(a) Answer the following questions.
1. What was the balance in Work in Process Inventory on July 1 if these were the only unfinished jobs?
2. What was the predetermined overhead rate in June if overhead was applied on the basis of direct labor cost?
3. If July is the start of a new fiscal year and the overhead rate is 20% higher than in the preceding year how much overhead should be applied to Job 210 in July?
4. Assuming Job 210 is complete what is the total and unit cost of the job?
5. Assuming Job 211 is the only unfinished job at July 31 what is the balance in Work in Process Inventory on this date?
(b) Journalize the summary entries to record the assignment of costs to the jobs in July. (Note: Make one entry in total for each manufacturing cost element.)

Question

Job cost sheets for Howard Manufacturing are as follows:

Instructions
(a) Answer the following questions.
1. What was the balance in Work in Process Inventory on July 1 if these were the only unfinished jobs?
2. What was the predetermined overhead rate in June if overhead was applied on the basis of direct labor cost?
3. If July is the start of a new fiscal year and the overhead rate is 20% higher than in the preceding year how much overhead should be applied to Job 210 in July?
4. Assuming Job 210 is complete what is the total and unit cost of the job?
5. Assuming Job 211 is the only unfinished job at July 31 what is the balance in Work in Process Inventory on this date?
(b) Journalize the summary entries to record the assignment of costs to the jobs in July. (Note: Make one entry in total for each manufacturing cost element.)

Madelyn Berry · Accepted Answer

Final Answer :  (a) 1.   Job 	ext{Job} Job     210 − $ 9 , 000 + $ 8 , 000 + $ 12 , 000 = $ 29 , 000  210-\$ 9,000+\$ 8,000+\$ 12,000=\$ 29,000  210 − $9 , 000 + $8 , 000 + $12 , 000 = $29 , 000  Job 	ext{ Job}  Job     211 − $ 5 , 000 + $ 6 , 000 + $ 9 , 000 = 20 , 000 ‾  211-\$ 5,000+\$ 6,000+\$ 9,000=\underline{20,000}  211 − $5 , 000 + $6 , 000 + $9 , 000 = 20 , 000 ​ \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  \quad  $ 49 , 000 ‾ \underline{\$49,000} $49 , 000 ​ 2. Manufacturing overhead rate = 150% of direct labor cost ($12000 ÷ $8000or $9000 ÷ $6000)3. July overhead rate = 150% × 120% = 180%Overhead applied in July = $30000 × 180% = $54000 4.  Direct materials $ 23 , 000  Direct labor  38 , 000  Manufacturing overhead  ( $ 12 , 000 + $ 54 , 000 ) 66 , 000  Total cost  $ 127 , 000  Unit cost  ( $ 127 , 000 ÷ 1 , 500 ) $ 84 , 67 \begin{array}{lr}	ext { Direct materials} & \$23,000\	ext { Direct labor }  &  38,000 \	ext { Manufacturing overhead }(\$ 12,000+\$ 54,000)  &  66,000 \	ext { Total cost }  &  \$ 127,000 \	ext { Unit cost }(\$ 127,000 \div 1,500)  &  \$ 84,67\end{array}  Direct materials  Direct labor   Manufacturing overhead  ( $12 , 000 + $54 , 000 )  Total cost   Unit cost  ( $127 , 000 ÷ 1 , 500 ) ​ $23 , 000 38 , 000 66 , 000 $127 , 000 $84 , 67 ​ 5.  Direct materials  $ 21 , 000  Direct labor  26 , 000  Manufacturing overhead  ( $ 9 , 000 + $ 36 , 000 ) 45 , 000  Total cost of work in process  $ 92 , 000 \begin{array}{lr}	ext { Direct materials }  &  \$ 21,000 \	ext { Direct labor }  &  26,000 \	ext { Manufacturing overhead }(\$ 9,000+\$ 36,000)  &  45,000 \	ext { Total cost of work in process }  &  \$ 92,000\end{array}  Direct materials   Direct labor   Manufacturing overhead  ( $9 , 000 + $36 , 000 )  Total cost of work in process  ​ $21 , 000 26 , 000 45 , 000 $92 , 000 ​ (b)  Work in Process Inventory  30 , 000  Raw Materials Inventory  30 , 000  Work in Process Inventory  50 , 000  Factory Labor. 50 , 000 Work in Process Inventory  90 , 000  Manufacturing Overhead  90 , 000 \begin{array}{llr}  	ext { Work in Process Inventory }  & 30,000\ 	ext {  Raw Materials Inventory }  & & 30,000\\ 	ext {  Work in Process Inventory }  & 50,000\ 	ext {  Factory Labor.}  & & 50,000\\ 	ext {Work in Process Inventory   }  & 90,000\ 	ext { Manufacturing Overhead }  & & 90,000\\end{array}  Work in Process Inventory   Raw Materials Inventory   Work in Process Inventory   Factory Labor. Work in Process Inventory   Manufacturing Overhead  ​ 30 , 000 50 , 000 90 , 000 ​ 30 , 000 50 , 000 90 , 000 ​

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