Materials Inventory on September 1 totaled $5,450, and $650 worth of materials w

Question

Materials Inventory on September 1 totaled $5,450, and $650 worth of materials was purchased during the month Indirect materials of $95 were withdrawn from materials inventory On September 1, finished goods inventory consisted of two jobs, PP-12, costing $2,290, and PP-14, with a cost of $940 Costs for both jobs were transferred to Cost of Services &Bed; during the month. Also during September Jobs PP-24 and PP-30 were completed Completing Job PP 24 required an additional $1, 270 in direct labor. The completion costs for Job PP-30 included $646 in direct materials and $4,500 in direct labor Pete s Patios used a total of $1,878 of direct materials (excluding the $95 indirect materials) during the period and total direct labor costs during the month amounted to $8,220 Overhead has been estimated at 50 percent of direct labor costs and this relation has been the same for the past few years Compute the costs to complete Jobs PP-24 and PP-30 and the balances m the September 30 inventory accounts

Explanation / Answer

Cost To Complete PP24 PP30 Direct material 0 646 Direct labor 1270 5400 overhead 635 2700 Cost To Complete 1905 8746 Begiining Material 5450 ADD Material Purchased 650 Less Issue to prodution Indirect material 95 Direct material. 1878 Balance as on September 30 Materials Inventory 4127 Beginning WIP(1108+550)+418+1650+.50(418+1650) 4760 Direct Material 1878 Direct Labor 8220 Overhead 8220/2 4110 Less transferred to Finished Goods PP24 3640 PP30 10421 Balance as on September 30 Work-in-Process Inventory 4907 Unita tansferd to Finished Goods PP24 PP30 Direct material 1108 1196 Direct labor 418+1270 ,4500+1650 1688 6150 Overhead 844 3075 tansferd to Finished Goods 3640 10421 Finished Goods Openning 2290+940 3230 ADD PP24 3640 PP30 10421 Less Sold 3230 Balance as on September 30 Finished Goods Inventory 14061

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