Problem
Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appears in the company's Work in Process Inventory account for the month of June:
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Debits to account:
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Balance, June 1
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5,000
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Direct materials
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20,000
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Direct labor
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11,900
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Manufacturing overhead (applied to jobs as 125% of direct labor cost)
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14,875
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Total debits to account
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51,775
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Credits to account:
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Transferred to Finished Goods Inventory account
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44,000
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Balance, June 30
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7,775
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Instructions
a. Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $1,600, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30.
b. Prepare general journal entries to summarize:
1. The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June.
2. The transfer of production completed during June to the Finished Goods Inventory account.
3. The cash sale of 80 percent of the merchandise completed during June at a total sales price of $56,000. Show the related cost of goods sold in a separate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Badgersize Company has the following information for its Forming Department for the month of August:
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Work in Process Inventory, August 1: 20,000 units
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Direct materials: 100% complete
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80,000
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Conversion: 20% complete
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24,000
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Balance in work in process, August 1
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104,000
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Units started during August
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52,000
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Units completed and transferred in August
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59,000
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Work in process (70% complete), August 31
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?
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Costs charged to Work in Process in August
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Direct materials
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139,000
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Conversion costs:
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Direct labor
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109,000
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Overhead applied
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147,000
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Total conversion
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256,000
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Assume materials are added at the start of processing.
Instructions
a. Calculate the equivalent units for the Forming Department for the month of August equivelent units for direct materials :
Equivelent units for conversion
b. Find the cost per equivalent unit of input resource. (Round your answers to 2 decimal places.)