Montgomery Inc., a manufacturer of custom fairy costumes uses a JOB ORDER cost s
ID: 341025 • Letter: M
Question
Montgomery Inc., a manufacturer of custom fairy costumes uses a JOB ORDER cost system. The following data summarize the operations related to production for April 2016, the first month of operations a.) Purchased Materials $9,000 b.) Materials requisitioned from the stock room: Materials 0 No. 506 No. 507 Indirect Material S 2,000 3,000 400 Total5,400 c.) Factory labor accrued for the month: 0 No. 506 No. 507 Indirect labor Labor $ 900 300 200 1,400 Hours 30 hrs 10 hrs Total d.) Factory Overhead costs incurred ON ACCOUNT, $400. e.) The Factory overhead rate is $18 per Direct Labor Hour. ONLY Job No. 506 was COMPLETED and transferred to Finished Goods during April,Explanation / Answer
1) DM DL FOH Total No 506 2,000 900 540 3,440 no 507 3,000 300 180 3,480 2) Journal Entry Description Debit Credit a) Raw materials inventory 9,000 Accounts payable 9,000 b) Work in process inventory 5,000 factory overhead 400 Raw materials inventory 5,400 c) Work in process inventory 1,200 factory overhead 200 Factory wages payable 1,400 d) Factory overhead 400 accounts payable 400 e) work in process inventory 720 factory overhead 720 f) Finished goods inventory 3,440 work in process inventory 3,440 Materials a) 9,000 b) 5,400 End bal 3600 Factory overhead b) 400 c) 200 d) 400 e) 720 end bal 280 Work in process inventory b) 5,000 c) 1,200 e) 720 f) 3,440 End bal 3480 finished goods inventory f) 3,440 End bal 3,440