Minneapolis Machinery began 2008 with three jobs in process: Job No. Direct mate
ID: 2443148 • Letter: M
Question
Minneapolis Machinery began 2008 with three jobs in process:
Job No. Direct material Direct Labor Overhead Total
247 $38,600 $45,700 $17,366 $101,666
251 88,300 104,900 39,862 233,062
253 72,700 84,800 32,224 189,724
Totals 199,600 235,400 89,452 524,452
During 2008, the following transactions occurred:
1. The firm purchased and paid for the $271,000 of raw material
2. Factory payrtoll records revealed the following:
- Indirect labor incurred was $27,000
- Direct labor incurred was $301,400 and was associated with the jobs as follows:
Job No. Direct Labor Cost
247 $8,700
251 4,400
253 10,500
254 68,300
255 72,500
256 47,300
257 89,700
3. Material requisition forms issued during the year revealed the following:
- Indrect material issued totaled $38,000
- Direct material issued totaled $233,200 and was associated with the jobs as follows:
Job No. Direct Material Cost
247 $6,200
251 3,100
253 8,400
254 52,600
255 59,900
256 36,400
257 66,600
4. Overhead is applied to jobs on the basis of direct labor cost. Management budgeted overhead of $120,000 and total direct labor cost of $300,00 for 2008. Actual total factory overhead costs (including indirect labor and indirect material) for the year totaled $122,200.
5. Jobs #247 through #255 were completed and delivered to customer , who paid for the goods in cash. The revenue on these jobs was $1,132,387.
a) Journalize all preceding events.
b) Determine the ending balances for the jobs still in process.
c) Determine the cost of jobs completed, adjusted for underapplied or overapplied overhead.
Explanation / Answer
Raw Material Inventory 271,000.00 Cash 271,000.00 Factory Labor 301,400.00 Factory Wages Payable 301,400.00 Work In Process 301,400.00 Manufacturing Ohead 27,000.00 Factory Labor 328,400.00 Work In Process 233,200.00 Manufacturing Ohead 38,000.00 Raw Material Inventory 271,200.00 Work In Process 120,000.00 Manufacturing Ohead 120,000.00 Manufacturing Ohead 57,200.00 Cash 57,200.00 Finished Goods Inventory 305,406.00 WIP 305,406.00 (Job 247 -120,046 Job 255- 185,360) Cash 1,132,287.00 Revenue 1,132,287.00