Question

Hildreth Company uses a job order cost system. The following data summarize the operations related to production for April, the first month of operations.

a. Materials purchased on account, $147,000.
b. Materials requisitioned and factory labor used:

Job No. Materials Factory Labor
101 $19,320 $19,500
102 23,100 28,140
103 13,440 14,000
104 38,200 36,500
105 18,050 15,540
106 18,000 18,700
For general factory use 9,000 20,160

c. Factory overhead costs incurred on account, $6,000.
d. Depreciation of machinery and equipment, $4,100.
e. The factory overhead rate is $40 per machine hour.

Job No. Machine Hours
101 23
102 43
103 37
104 65
105 32
106 35
Total 235

f. Jobs completed: 101, 102, 103, and 105.
g. Jobs were shipped and customers were billed as follows: Job 101, $7,640; Job 102, $10,810; Job 105, $16,490.

Required:

1. Journalize the entries to record the summarized operations.
2. Post the appropriate entries to T-accounts for Work in Process and Finished Goods.
3. Prepare a schedule of unfinished jobs to support the balance in the Work in Process account.
4. Prepare a schedule of finished jobs to support the balance in the Finished Goods account.

Answer 1

raw materials 147,000 debit

account payable 147,000 credit

WIP-inventory 130,110 debit

Factory Overhead 9,000 debit

raw materials 139,110 credit

WIP-inventory 132,380 debit

Factory Overhead 20,160 debit

Wages Payable 152,540 credit

Factory overhead 6,000 debit

Account Payable 6,000 credit

Factory Overhead 4,100 debit

Acc Dep machinery 4,100 credit

WIP-inventory 9,400 debit

Factory Overehad 9,400 credit

Finished Goods 233,790 debit

WIP-Inventory 233,790 credit

Cost of Good Sold 127,570 debit

Finished Good Invnetory 127,570 credit

account receivables 34,940 debit

sales revenue 34,940 credit

Cost of GoodSold 29,860 debit

Factory Overhead 29,860 credit

Step-by-step explanation:

Materials Labor Overhead Total

101 19320 19500 920 39740

102 23100 28140 1720 52960

103 13440 14000 1480 28920

104 38200 36500 2600 77300

105 18050 15540 1280 34870

106 18000 18700 1400 38100

Total 130110 132380 9400 271890

Completed 101 + 102 + 103 + 105

Total finished good: 233,790

Applied overhead calculations:

235 hours x $40 = 9,400

COst of Good Sold

101 + 102 + 105

Total cost: 127,570

Sales Revenues

7,640 + 10,810 + 16,490 = 34,940

Overhead T account

DEBIT CREDIT

9,000

20,160

6,000

4,100

9,400

29860 UNDERAPPLIED

we must increase it against Cost of Good Sold