Grand Valley Apparel Co. uses a job order cost system. The following data summar

Question

Grand Valley Apparel Co. uses a job order cost system. The following data summarize the operations related to production for May 2010, the first month of operations: a. Materials purchased on account, $68,000. b. Materials requisitioned and factory labor used: Job Materials Factory Labor No. 401 No. 402 No. 403 No. 404 No. 405 No. 406 For general factory use 9,200 11,000 6.400 18,200 8,600 8,500 4,100 S 9,250 13,400 5,000 17,400 7,400 8,900 9,600 c. Factory overhead costs incurred on account, $2,750. d. Depreciation of machinery and equipment, $1,870. e. The factory overhead rate is $25 per machine hour. Machine hours used: Job Machine Hours No. 401 No. 402 No. 403 No. 404 No. 405 No. 406 Total 108 110 86 160 109 690 f. Jobs completed: 401, 402, 403, and 405. g. Jobs were shipped and customers were billed as follows: Job 401, $26,000; Job 402, $33,400; Job 405, $23,400. Instructions 1. Journalize the entries to record the summarized operations. 2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as dates. Insert memo account balances as of the end of the month. account goods account. 3. Prepare a schedule of unfinished jobs to support the balance in the work in process 4. Prepare a schedule of completed jobs on hand to support the balance in the finished

Explanation / Answer

JOURNAL ENTRY Ref Account Debit Credit a Raw material inventory $68,000 Accounts payable $68,000 b Work in process $        61,900 (9200+11000+6400+18200+8600+8500) Manufacturing overhead $          4,100 Raw material Inventory $ 66,000 (61900+4100) b Work in Process $        61,350 (9250+13400+5000+17400+7400+8900) Manufacturing overhead $9,600 Wages payable $ 70,950 (53950+9600) c Manufacturing overhead $2,750 Accounts payable $2,750 d Manufacturing overhead $1,870 Accumulated depreciation $1,870 e Work in process $        17,250 (25*690) Manufacturing Overhead $ 17,250 Direct material Direct labor Manufacturing overhead Calculation of manufacturing overhead Total f Finished goods inventory $80,575 job 401 $9,200 $9,250 $        2,700 (25*108) $21,150 Work in process $80,575 Job 402 $11,000 $13,400 $        2,750 (25*110) $27,150 Job 403 $6,400 $5,000 $        2,150 (25*86) $13,550 Job405 $8,600 $7,400 $        2,725 (25*109) $18,725 Total $35,200 $35,050 $10,325 $80,575 g Accounts Receivable $        82,800 (26000+33400+23400) Sales Revenue $ 82,800 g Cost of goods sold $67,025 (21150+27150+18725) Finished goods inventory $67,025 T-Accounts WORK IN PROCESS Ref Description Debit Credit b Direct material used $        61,900 b Direct labor cost $        61,350 e Manufacturing overhead applied $        17,250 f Transferred to finished goods inventory $80,575 Ending Balance $        59,925 FINISHED GOODS Ref Description Debit Credit f Transferred from work in process $80,575 g Transferred to Cost of goods sold $67,025 Ending Balance $13,550 SCHEDULE OF UNFINISHED JOBS Direct material Direct Labor Applied Manufacturing overheadcalculation Manufacturing overhead Total Cost Job 404 $18,200 $17,400 (25*160) $        4,000 $39,600 Job 406 $8,500 $8,900 (25*117) $        2,925 $20,325 Total $26,700 $26,300 $6,925 $59,925 SCHEDULE OF COMPLETED JOBS ON HAND Direct material Direct Labor Applied Manufacturing overheadcalculation Manufacturing overhead Total Cost Job 403 $6,400 $5,000 (25*86) $        2,150 $13,550

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