E2-18 Recording Manufacturing Costs [LO 2-3, 2-4, 2-5]
Reyes Manufacturing Company uses a job order cost system. At the
beginning of January, the company had one job in process (Job 201)
and one job completed but not yet sold (Job 200). Job 202 was
started during January. Other select account balances follow
(ignore any accounts that are not listed).
During January, the company had the following transactions:
(a) Purchased $64,000 worth of materials on account.
(b) Recorded materials issued to production as
follows:
Job Number
Total Cost
201
$
10,200
202
21,000
Indirect materials
6,000
$
37,200
(c) Recorded factory payroll costs from direct labor time
tickets that revealed the following:
Job Number
Hours
Total Cost
201
109
$
2,400
202
390
10,600
Factory supervision
5,000
$
18,000
(d) Applied overhead to production at a rate of $29.00 per direct
labor hour for 499 actual direct labor hours.
(e) Recorded the following actual manufacturing overhead costs:
Item
Total Cost
Description
Factory rent
$
2,400
Paid in cash
Depreciation
3,400
Factory equipment
Factory utilities
3,500
Incurred but not paid
Factory insurance
1,800
Prepaid policy
$
11,100
(f) Completed Job 201 and transferred it to Finished Goods
Inventory.
(g) Sold Job 200 for $51,700.
Job 202 was still in process at the end of January.
Required:
1. Post the preceding transactions to T-accounts.
(Note: Capture the offsetting of debits and credits to other
accounts such as Cash, Payables, Accumulated Depreciation, and so
on in Miscellaneous Accounts.)
2. Compute the ending balance in the
following accounts:
3. Compute the total cost of Jobs 201 and
202 at the end of January.
