Milner Manufacturing uses a job order cost system. On May 1, the company has a b
ID: 2353220 • Letter: M
Question
Milner Manufacturing uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,200 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,200. During May, a summary of source documents reveals the following.Job Number Materials Requisition Slips Labor Time Tickets
429 $2,500 $1,900
430 3,500 3,000
431 4,400 $10,400 7,600 12,500
800 1,200
$11,200 $13,700
Milner Manufacturing applies manufacturing overhead to jobs at an overhead rate of 80% of direct labor cost. Job No. 429 is completed during the month.
A. Prepare summary journal entries to record: (i) the requisition slips, (ii) the time tickets, (iii) the assignment of manufacturing overhead to jobs, and (iv) the completion of Job No. 429.
B.Post the entries to Work in Process Inventory, and prove the agreement of the control account with the job cost sheets.
Explanation / Answer
To Record Overhead and Finished Goods Inventory Work in process inventory
Manufacturing Overhead ($12,500 80%) =10,000 =10,000
Finished goods inventory Work in process inventory ($2000 +$2500 + $1900 +1520)= 7,920 =7920
Work in Process Inventory Account
May 1 Balance 3,200
May 31 10,400
May 31 Balance 12,500 28,180
May 31 10,000 May 31 7,920
Job Cost Sheets Job 430 431 1200
BW IP 1200
DM 3500 + 4400 = 7900
DL 3000+ 7600= 10,60 0
MOH 2400 +6080 =8480
Total 10,10 0 + 18,08 0 =28,18 0