Please help me fill out the boxes below. Phillips Corporation’s fiscal year ends

Question

Please help me fill out the boxes below.

Phillips Corporation’s fiscal year ends on November 30. The following accounts are found in its job order cost accounting system for the first month of the new fiscal year.

Other data:

List the letters (a) through (m) and indicate the amount pertaining to each letter.

Raw Materials Inventory

Work in Process Inventory

Finished Goods Inventory

Manufacturing Overhead

1. On December 1, two jobs were in process: Job No. 154 and Job No. 155. These jobs had combined direct materials costs of $ 9,850 and direct labor costs of $ 15,800. Overhead was applied at a rate that was 75% of direct labor cost. 2. During December, Job Nos. 156, 157, and 158 were started. On December 31, Job No. 158 was unfinished. This job had charges for direct materials $4,500 and direct labor $ 5,100, plus manufacturing overhead. All jobs, except for Job No. 158, were completed in December. 3. On December 1, Job No. 153 was in the finished goods warehouse. It had a total cost of $ 5,100. On December 31, Job No. 157 was the only job finished that was not sold. It had a cost of $ 4,500. 4. Manufacturing overhead was $ 1,120 underapplied in December.

Explanation / Answer

SOLUTION

(a) Opening balance of raw materials = Material requisition + Ending balance of raw materials - Raw materials purchases

= $18,850 + $8,145 - $17,825

= $9,170

(b) Calculation of beginning balance of Work in process inventory is as shown below:

(c) Direct materials = Material requision - Indirect materials

= $18,850 - $3,000

= $15,850

(d) Overhead = Direct Labor * Applied overhead rate

= $9,000 * 75% = $6,750

(e) Ending work in process inventory = Direct materials + Direct labor + Overhead- Beginning balance

= $4,500 + $5,100 + ($5,100*75%) - 0

=  $4,500 + $5,100 + $3,825 - 0

= $13,425

(f) Jobs Completed = Direct materials + Direct labor + Overhead + Opening balance of work in process inventory - Ending balance of work in process inventory

= $15,850 + $9,000 + $6,750 + $37,500 - $13,425

= $55,675

(g) Opening balance of finished goods inventory data located from the Job 153. Thus the Opening balance of finished goods inventory is $5,100.

(h) Jobs Completed = Direct materials + Direct labor + Overhead + Opening balance of work in process inventory - Ending balance of work in process inventory

= $15,850 + $9,000 + $6,750 + $37,500 - $13,425

= $55,675

(i) Cost of goods sold = Jobs completed + Opening finished goods - Ending finished goods

= $55,675 + $5,100 - $4,500 = $56,275

(j) Ending balance of finished goods inventory data need to locate from the Job 157 which is given in the question i.e $4,500.

(k) Locate the amount of wages assigned in factory labour ledger. Factory labour account balance would be the amount of wages assigned i.e $12,125

(l) Indirect Labor = Wages assigned - Direct labor wages

= $12,125 - $9,000 = $3,125

(m) Applied overhead = Actual overhead - Under applied overhead

= ($3,000 + $1,745 + $3,125) - $1,120

= $6,750

Particulars Amount ($) Direct materials 9,850 Direct labor costs 15,800 Manufacturing overhead (15,800*75%) 11,850 Total beginning balance of Work in process inventory 37,500

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