Foster Manufacturing uses a job order cost accounting system. On April 1, the company has Work in Process Inventory of $7,600 and two jobs in process: Job No. 221, $3,600, and Job No. 222, $4,000. During April, a summary of source documents reveals the following: For Materials Requisition Slips Labor Time Tickets
Job No. 221 $1,200 $2,100
222 1,700 2,200
223 2,400 2,900
224 2,600 2,800
General use 600 400
Totals $8,500 $10,400

Foster Manufacturing uses a job order cost accounting system. On April 1, the company has Work in Process Inventory of $7,600 and two jobs in process: Job No. 221, $3,600, and Job No. 222, $4,000. During April, a summary of source documents reveals the following:

For Materials Requisition Slips Labor Time Tickets
Job No. 221 $1,200 $2,100
222 1,700 2,200
223 2,400 2,900
224 2,600 2,800
General use 600 400
Totals $8,500 $10,400

Foster applies manufacturing overhead to jobs at an overhead rate of 70% of direct labor cost. Job No. 221 is completed during the month.

Required:
Prepare summary journal entries to record the raw materials requisitioned, factory labor used, the assignment of manufacturing overhead to jobs, and the completion of Job No. 221.

A. Dr Work in Process Inventory $7,900

Dr Manufacturing Overhead $600

Cr Raw Materials Inventory $8,500

B. Dr Work in Process Inventory $10,000

Dr Manufacturing Overhead $400

Cr Factory Labor $10,400

C. Dr Work in Process Inventory $7,000

Cr Manufacturing Overhead $7,000

D. Dr Finished Goods Inventory $8,370

Cr Work in Process Inventory $8,370

Explanation:

Preparation of summary journal entries to record the raw materials requisitioned, factory labor used, the assignment of manufacturing overhead to jobs, and the completion of Job No. 221.

a)Preparation of summary journal entries to record the raw materials requisitioned,

April 30

Dr Work in Process Inventory $7,900

($8,500+$600)

Dr Manufacturing Overhead $600

Cr Raw Materials Inventory $8,500

(To record the raw materials requisitioned)

B. Preparation of summary journal entries to record factory labor used

Dr Work in Process Inventory $10,000

($10,400-$400)

Dr Manufacturing Overhead $400

Cr Factory Labor $10,400

(To record factory labor used)

C. Preparation of summary journal entries to record the assignment of manufacturing overhead to jobs

Dr Work in Process Inventory $7,000

Cr Manufacturing Overhead $7,000

($10,000 × 70% = $7,000)

(To record the assignment of manufacturing overhead to jobs)

4. Preparation of summary journal entries to record the completion of Job No. 221.

Dr Finished Goods Inventory $8,370

Cr Work in Process Inventory $8,370

($3,600 + $1,200 + $2,100 + $1,470 = $8,370)

(To record the completion of Job No. 221)

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