Question

Big Timber Furniture Company manufactures furniture. Big Timber Furniture uses a job order cost system. Balances on June 1 from the materials ledger are as follows:

Fabric $19,600
Polyester filling 5,900
Lumber 43,900
Glue 1,900
The materials purchased during June are summarized from the receiving reports as follows:
Fabric $100,500
Polyester filling 139,700
Lumber 275,400
Glue 9,500
Materials were requisitioned to individual jobs as follows:
Fabric Polyester Filling Lumber Glue Total
Job 304 $20,000 $52,300 $210,100 $282,400
Job 305 32,500 68,400 189,500 290,400
Job 306 48,800 78,400 313,200 440,400
Factory overhead-indirect materials $37,700 37,700
Total $101,300 $199,100 $712,800 $37,700 $1,050,900
The glue is not a significant cost, so it is treated as indirect materials (factory overhead).
A. Determine the total purchase of materials in June.
B. Determine the amounts of materials transferred to Work in Process and Factory Overhead during June.
C. Determine the June 30 balances that would be shown in the materials ledger accounts.

Answer 1

Part A.

$525,100

Part B.

Materials transferred to Work in Process =$1,013,200 and

materials transferred to Factory Overhead = $37,700

Part C.

Ledger Balances

Fabric = $18,800 debit

Polyester filling = $53,500 credit

Lumber = $393,500 credit

Glue = $26,300 credit

Step-by-step explanation:

Calculation of Total Materials Purchases

Fabric $100,500

Polyester filling $139,700

Lumber $275,400

Glue $9,500

Total $525,100

Calculation of Materials Transferred to Work in Process and Factory Overhead

Materials Transferred to Work in Process

Fabric total $101,300

Polyester Filling total $199,100

Lumber total $712,800

Total $1,013,200

Materials Transferred to Factory Overhead

Glue total $37,700

Total $37,700

Balances to be shown in materials ledger accounts.

Balance = Opening Inventory + Purchases - Requisitioned

therefore

Fabric = $19,600 + $100,500 - $101,300 = $18,800 debit

Polyester filling = $5,900 + $139,700 - $199,100 = $53,500 credit

Lumber = $43,900 + $275,400 - $712,800 = $393,500 credit

Glue = $1,900 + $9,500 - $37,700 = $26,300 credit