Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations
a. Materials purchased on account, $45,000
b. Materials requisitioned and factory labor used:
Job Materials Factory Labor
301 $1,850 $2,500
302 3,150 7,220
303 2,200 5,350
304 1,800 2,400
305 4,230 6,225
306 1,770 2,900
For general factory use 1,200 5,000
c. Factory overhead costs incurred on account, $1,800
d. Depreciation of machinery and equipment, $2,500
e. The factory overhead rate is $30 per machine hour. Machine hours used:
Job Machine-Hours
301 30
302 60
303 41
304 63
305 70
306 36
Total 300
f. Jobs completed: 301, 302, 303 and 305
g. Jobs were shipped and customers billed as follows: Job 301, $8,500; Job 302, $16,150; Job 303, $13,400
Required:
1. Journalize the entries to record the summarized operations.
Record each item as an individual entry on March 31.
Record item g as 2 entries.
2. Post the appropriate entries to T-accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes.
Insert memo account balances as of the end of the month.
Determine the correct ending balance.
3. Prepare a schedule of unfinished jobs to support the balance in the Work in Process account.
4. Prepare a schedule of completed jobs on hand to support the balance in the Finished Goods account.

Required 1.

a.

Raw Materials $45,000 (debit)

Accounts Payable $45,000 (credit)

b.

Materials

Work  - In Process : 301  $1,850 (debit)

Work  - In Process : 302  $3,150 (debit)

Work  - In Process : 303  $2,200 (debit)

Work  - In Process : 304  $1,800 (debit)

Work  - In Process : 305  $4,230 (debit)

Work  - In Process : 306  $1,770 (debit)

Work  - In Process : Indirect Materials $1,200 (debit)

Raw Materials $16,200 (credit)

Labor

Work  - In Process : 301  $2,500 (debit)

Work  - In Process : 302  $7,220 (debit)

Work  - In Process : 303  $5,350 (debit)

Work  - In Process : 304  $2,400 (debit)

Work  - In Process : 305  $6,225 (debit)

Work  - In Process : 306  $2,900 (debit)

Work  - In Process : Indirect labor $5,000 (debit)

Salaries Payable  $31,595 (credit)

c.

Factory Overheads $1,800 (debit)

Account Payable $1,800 (credit)

d.

Work  - In Process : Depreciation $2,500 (debit)

Accumulated Depreciation $2,500 (credit)

e.

Work  - In Process : 301  $900 (debit)

Work  - In Process : 302  $1,800 (debit)

Work  - In Process : 303  $1,230 (debit)

Work  - In Process : 304  $1,890 (debit)

Work  - In Process : 305  $2,100 (debit)

Work  - In Process : 306  $1,080 (debit)

Factory Overheads  $9,000 (credit)

g.

Finished Goods Inventory : 301 (debit)

Finished Goods Inventory : 302 (debit)

Finished Goods Inventory : 303 (debit)

Finished Goods Inventory : 305 (debit)

Work  - In Process Inventory : 301 (credit)

Work  - In Process Inventory : 302 (credit)

Work  - In Process Inventory : 303 (credit)

Work  - In Process Inventory : 305 (credit)

Required 2.

Work In Process T- Account

Debit :

Raw Materials $16,200

Direct Labor $31,595

Overheads

Credit :

Finished Goods

Closing Balance

Finished Goods Inventory T- Account

Debit :

Work In Process

Credit :

Cost of Goods Sold

Closing Balance

Explanation:

Cost of Job 301

Direct Materials               $1,850

Direct Labor                    $2,500

Factory Overheads           $900

Total Cost                       $5,250

Cost of Job 302

Direct Materials               $1,850

Direct Labor                    $2,500

Factory Overheads           $900

Total Cost                       $5,250

Cost of Job 303

Direct Materials               $1,850

Direct Labor                    $2,500

Factory Overheads           $900

Total Cost                       $5,250

Cost of Job 304

Direct Materials               $1,850

Direct Labor                    $2,500

Factory Overheads           $900

Total Cost                       $5,250

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