Sager Company manufactures variations of its product, a technopress, in response
ID: 2531433 • Letter: S
Question
Sager Company manufactures variations of its product, a technopress, in response to custom orders from its customers. On May 1, the company had no inventories of work in process or finished goods but held the following raw materials.
On May 4, the company began working on two technopresses: Job 102 for Worldwide Company and Job 103 for Reuben Company.
Purchased raw materials on credit and recorded the following information from receiving reports and invoices.
Receiving Report No. 426, Material M, 290 units at $290 each.
Receiving Report No. 427, Material R, 130 units at $270 each.
Record these purchases with a single journal entry. Enter the receiving report information on the materials ledger cards.
Requisitioned the following raw materials for production.
Requisition No. 35, for Job 102, 189 units of Material M.
Requisition No. 36, for Job 102, 72 units of Material R.
Requisition No. 37, for Job 103, 98 units of Material M.
Requisition No. 38, for Job 103, 102 units of Material R.
Requisition No. 39, for 27 units of paint.
Enter amounts for direct materials requisitions on the materials ledger cards and the job cost sheets. Enter the indirect materials amount on the materials ledger card.
Received the following employee time tickets for work in May.
Time tickets Nos. 1 to 10 for direct labor on Job 102, $86,000.
Time tickets Nos. 11 to 30 for direct labor on Job 103, $53,000.
Time tickets Nos. 31 to 36 for equipment repairs, $20,000.
Record direct labor from the time tickets on the job cost sheets.
Paid cash for the following items during the month: factory payroll, $159,000, and miscellaneous overhead items, $114,000. Use the time tickets to record the total direct and indirect labor costs.
Finished Job 102 and transferred it to the warehouse. The company assigns overhead to each job with a predetermined overhead rate equal to 80% of direct labor cost.
Enter the allocated overhead on the cost sheet for Job 102, fill in the cost summary section of the cost sheets.
Delivered Job 102 and accepted the customer’s promise to pay $520,000 within 30 days.
Applied overhead cost to Job 103 based on the job’s direct labor to date.
Required:
Complete the materials ledger cards for Material M, Material R, and paint using the information given in part a and b. Complete the job cost sheets for Jobs 102 and 103 using the information given in part a, b, c and e. Prepare journal entries for part a through g.
Complete the job cost sheets for Jobs 102 and 103 using the information given in part a, b, c and e.
Prepare journal entries for part a through g. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet
Record the purchase of raw materials on credit from the receiving reports and invoices given in letter a). Record these purchases with a single journal entry.
Note: Enter debits before credits.
Material M 350 units @ $ 290 = $ 101,500 Material R 135 units @ 270 = 36,450 Paint 100 units @ 80 = 8,000 Total cost $ 145,950Explanation / Answer
Material Ledger Card Item Material M Received Issued Balance Date Receiving Report Units Unit Price Total Price Requisition Units Unit Price Total Price Units Unit Price Total Price 1-May 350 290 101500 4-May 426 290 290 84100 640 290 185600 4-May 35 189 290 54810 350 290 101500 4-May 37 98 290 28420 252 290 73080 Material Ledger Card Item Material R Received Issued Balance Date Receiving Report Units Unit Price Total Price Requisition Units Unit Price Total Price Units Unit Price Total Price 1-May 135 270 36450 4-May 427 130 270 35100 265 270 71550 4-May 36 72 270 19440 193 270 52110 4-May 38 102 270 27540 91 270 24570 Material Ledger Card Item Paint Received Issued Balance Date Receiving Report Units Unit Price Total Price Requisition Units Unit Price Total Price Units Unit Price Total Price 1-May 100 80 8000 4-May 39 27 80 2160 73 80 5840 JOB COST SHEET Customer's Name Worldwide Company Job No. 102 Direct Materials Direct Labor Overhead Costs Applied Requisition Number Amount Time Ticket Number Amount Rate % Amount 35 54810 1 to 10 86000 80% 68800 (86000*80%) 36 19440 Total 74250 Total 86000 68800 Summary of Costs Direct Material 74250 Direct Labour 86000 Overhead 68800 Total cost of Job 229050 Customer's Name Reuben Company Job No. 103 Direct Materials Direct Labor Overhead Costs Applied Requisition Number Amount Time Ticket Number Amount Rate % Amount 37 28420 11 to 30 53000 80% 42400 (53000*80%) 38 27540 Total 55960 Total 53000 42400 Summary of Costs Direct Material 55960 Direct Labour 53000 Overhead 42400 Total cost of Job 151360 Record these purchases with a single journal entry. Enter the receiving report information on the materials ledger cards. a) Raw Material Dr. 119200 (84100+35100) Accounts Payable 119200 d) Factory Payroll 159000 Cash 159000 Factory Overhead 114000 Cash 114000 e) Finished Goods Inventory 229050 Goods in Process 229050 f) Accounts Receivable 520000 Sale 520000 g) Goods in Process Inventory 130210 Factory Overhead 2160 Raw Material Inventory 132370 Goods in Process Inventory 139000 Factory Overhead 20000 Factory Payroll 159000
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