eBook Recording Factory Labor Costs The weekly time tickets indicate the followi
ID: 2528947 • Letter: E
Question
eBook Recording Factory Labor Costs The weekly time tickets indicate the following distribution of labor hours for three direct labor employees Hours Job 201 Job 202 Job 203 ProcesS Improvement John Washington George Jefferson Thomas Adams The direct labor rate earned per hour by the three employees is as follows Washington Jefferson Adams 17 14 18 17 6 12 10 $16 24 The process improvement category includes training, quality improvement, housekeeping, and other indirect tasks. a. Determine the amounts of factory labor costs transferred to Work in Process and Factory Overhead for the week. Factory labor costs transferred to Work in Process Factory labor costs transferred to Factory Overhead b. Assume that Jobs 201 and 202 were completed but not sold during the week and that Job 203 remained incomplete at the end of the week. How would the direct labor costs for all three jobs be reflected on the financial statements at the end of the week? Direct Labor Costs Job 201 would become part of finished goods inventory Job 202 would become part of finished goods inventory Job 203 would remain part of work-in-process inventoryExplanation / Answer
Since nothing specific is mentioned about the stage of completion of Job, it is assumed that they are Work in progress"WIP" ( Assumption is in line of the Requirement of the question).
As the Process Improvement includes certain activities like training, quality improvement, etc, the same can not be directly linked to any particular job, hence, can not be charged to specific jobs. So the amount shall be transferred to factory overheads. Total = $ 184 (16*2+24*3+20*4).
The hours spent on job 201, 202, 203 is separately identifiable, hence it would be transferred to WIP a/c.
Total = $ 2336 [(17+14+6)*16+(11+18+12)*24+(11+17+10)*20].
Please note that second part is already answered in the qeustion, hence, I have not given my answer.
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