Micro Enterprises had the following job order transactions during the month of A

Question

Micro Enterprises had the following job order transactions during the month of April. Record the transactions in T-accounts, including issuance of materials, labor, and factory overhead applied; completed jobs sent to finished goods inventory, and sales of finished goods. Also show T-accounts in place of Job Cost Sheets for each job, and place of the subsidiary ledger for Finished Goods.

Apr

1 Purchased materials on acct, $35,000

10 Issued Direct materials to Job 33, $10,000, issued indirect materials of $700

11 Issued direct materials to Job 34, $8,000, issued indirect materials of $430

12 Issued direct materials to Job 35, $11,000, issued indirect materials of $670

25 Incurred labor of $21,300: Job 33, $6,000 (300 hours), Job 34, $4,000 (200 hours). Job 35, $5,000 (250 hours); also incurred indirect labor of $6,300

25 Applied factory overhead: $4.85 per direct labor hour

30 Transferred Job # 33 and 35 to the finished goods inventory account as products F and H

30 Sold product F for $25,000 on account. Calculate the Gross Profit.

Explanation / Answer

RAW MATERIAL INVENTORY Accounts payable 35,000 WIP-Job 33 10,000 WIP Job 34 8,000 WIP Job 35 11,000 Manufacturing OH 1,800 Ending Balance 4,200 MANUFACTURING OVERHEADS Raw material 1,800 WIP-Job 33 1,455 Wages payable 6,300 WIP Job 34 970 WIP Job 35 1213 Ending balance 4,462 WORK IN PROCESS INVENTORY-JOB 33 Raw material 10,000 Finished Goods Inv. 17,455 Wages payable 6,000 Manufacturing Overheads 1,455 Balance 0 WORK IN PROCESS INVENTORY-Job 34 Raw material Inv. 8,000 Wages Payable 4,000 Manufacturing Overheads 970 Balance 12,970 WORK IN PROCESS INVENTORY-Job 35 Raw material Inv. 11,000 Finished Goods inv. 17,213 Wages Payable 5,000 Manufacturing Overheads 1,213 Balance 0 FINISHED GOODS INVENTORY WIP Job 33 17,455 Cost of Goods sold 17,455 WIP Job 35 17,213 Balance 17,213 Cost of goods sold Finished Goods inv. 17,455 Balance 17,455 Sales revenue Accounts receivable 25,000 Balance 25000 Gross Profit: Sales revenue 25000 Less: Cost of goods sold 17455 Gross Profit: 7545

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