Question

Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories. a. $94,000 in raw materials were purchased for cash.b. $89,000 in raw materials were requisitioned for use in production. Of this amount, $78,000 was for direct materials and the remainder was for indirect materials.c. Total labor wages of $132,000 were incurred and paid. Of this amount, $112,000 was for direct labor and the remainder was for indirect labor.d. Additional manufacturing overhead costs of $143,000 were incurred and paid.e. Manufacturing overhead costs of $152,000 were applied to jobs using the company’s predetermined overhead rate.f. All of the jobs in progress at the end of the month were completed and shipped to customers.g. Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold.

Answer 1

Question Completion:

1. Post the above transactions to T-Accounts

2. Determine the adjusted costs of good sold for the period.

Answer:

Jurvin Enterprises

1.  T- Accounts:

Date  Description                                     Debit            Credit

         Raw Materials Account

a.       Cash                                             $94,000

b.       Work in Process Account                              $89,000

         Balance                                                               5,000

        Cash Account

a.       Raw Materials Account                                 $94,000

c.       Wages Account                                              132,000

d.       Manufacturing Overhead Account               143,000

        Work in Process Account

b.      Raw Materials                             $89,000

c.       Wages Account                          132,000

e.      Manufacturing Overhead           152,000

f.       Cost of Goods Sold                                     $373,000

        Wages Account

c.      Cash Account                           $132,000

c.      Work in Process Account                            $132,000

        Manufacturing Overhead Account

d.      Cash Account                          $143,000

e.      Work in Process Account                           $152,000

g.       Cost of Goods Sold                     11,000

       Cost of Goods Sold Account

f.       Work in Process Account      $373,000

g.      Overapplied Overhead                                 $11,000

Explanation:

a) Data is as given in the question.

b) The Cost of Goods Sold totals $373,000 being the value of Work in Process that is transferred when all the jobs in progress at the end of the month were completed and shipped to customers.

c) The overapplied overhead arises from the difference between the overhead applied to work in process and the actual manufacturing overhead incurred.