Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2727875 • Letter: S
Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March): Estimated total fixed manufacturing overhead $ 10,000 Estimated variable manufacturing overhead per direct labor-hour $ 1.00 Estimated total direct labor-hours to be worked 2,000 Total actual manufacturing overhead costs incurred $ 12,500 Job P Job Q Direct materials $ 13,000 $ 8,000 Direct labor cost $ 21,000 $ 7,500 Actual direct labor-hours worked 1,400 500 Assume the ending raw materials inventory is $1,000 and the company does not use any indirect materials. Required: Prepare a completed Work in Process T-account including the beginning and ending balances and all debits and credits posted to the account. (Record the transactions in the given order. Leave no cells blank - be certain to enter "0" wherever required.)
Explanation / Answer
Work in Process T-account
Debit
Credit
Beginning balance
$ -
Cost of goods Completed and transferred
Job P (13000+21000+8400) =
$ 42,400.00
Direct Material Cost:
Job P
$ 13,000.00
Job Q
$ 8,000.00
Direct Labor Cost:
Job P
$ 21,000.00
Job Q
$ 7,500.00
Applied Overhead costs:
(Actual Direct Labor Hours *Plantwide overhead rate)
Job P (1400 hours * $6)
$ 8,400.00
Job Q (500 hours * $6)
$ 3,000.00
$ 60,900.00
$ 42,400.00
Ending Balance (60900 - 42400) =
$ 18,500.00
Note :
Calculation of Plantwide overhead rate :
Estimated total fixed manufacturing overhead
$ 10,000.00
Estimated total direct labor-hours to be worked
$ 2,000.00
Fixed Manufacturing overhead per hour (10000 / 2000)
$ 5.00
Add: Variable Manufacturing overhead per hour
$ 1.00
Plantwide overhead rate (Per Direct Labor Hour)
$ 6.00
Work in Process T-account
Debit
Credit
Beginning balance
$ -
Cost of goods Completed and transferred
Job P (13000+21000+8400) =
$ 42,400.00
Direct Material Cost:
Job P
$ 13,000.00
Job Q
$ 8,000.00
Direct Labor Cost:
Job P
$ 21,000.00
Job Q
$ 7,500.00
Applied Overhead costs:
(Actual Direct Labor Hours *Plantwide overhead rate)
Job P (1400 hours * $6)
$ 8,400.00
Job Q (500 hours * $6)
$ 3,000.00
$ 60,900.00
$ 42,400.00
Ending Balance (60900 - 42400) =
$ 18,500.00
Note :
Calculation of Plantwide overhead rate :
Estimated total fixed manufacturing overhead
$ 10,000.00
Estimated total direct labor-hours to be worked
$ 2,000.00
Fixed Manufacturing overhead per hour (10000 / 2000)
$ 5.00
Add: Variable Manufacturing overhead per hour
$ 1.00
Plantwide overhead rate (Per Direct Labor Hour)
$ 6.00
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