Question

The following selected data were taken from the books of the Owens O-Rings Company. The company uses job costing to account for manufacturing costs. The data relate to April operations
A) Materials and supplies were requisitioned from the stores clerk as follows:

Job 405, material X, $9,000.
Job 406, material X, $5,000; material Y, $8,000.
Job 407, material X, $9,000; material Y, $5,200.
For general factory use: materials A, B, and C, $4,300.

B) Time tickets for the month were chargeable as follows:


Job 405 $24,500 5,000 hours
Job 406 $16,000 5,600 hours
Job 407 $10,000 3,900 hours
Indirect labor $5,700

C) Other information:

Factory paychecks for $38,700 were issued during the month. Various factory overhead charges of $21,400 were incurred on account. Depreciation of factory equipment for the month was $7,400. Factory overhead was applied to jobs at the rate of $5.20 per direct labor hour. Job orders completed during the month: Job 405 and Job 406. Selling and administrative costs were $4,100. Factory overhead is closed out only at the end of the year.

The end of the month Work-in-Process Inventory balance would be:

a. $37,440.
b. $44,480.
c. $70,100.
d. $114,580.

Answer 1

Answer:

b. $44,480

Explanation:

As Job 407 was left out the ending inventory would be of Job 407

Materials + Labor + Factory Overhead= $9000+ $ 5200 + $10,000 + 3,900*$5.20= $44,480

The costs For Job 405 and 406 would be calculated as follows

                     Material X           Material Y

Job 405,          $9,000.

Job 406            $5,000              $8,000

Total                  $ 14,000             $8,000

Direct Labor                   Hours                      Cost              

Job 405                         5,000                       $24,500

Job 406                          5,600                       $16,000

Total                              10,600                         $40,000

Factory Overhead

Indirect Labor                      $5,700    

Factory paychecks            $38,700    

factory overhead charges $21,400

Depreciation                       $7,400

Selling and administrative costs  $4,100