Determine the direct and indirect labor used


Response to the following problem:

Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,000 of indirect materials and $11,200 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:

Job 301

 

Job 302

 

Direct materials

$10,200

Direct materials

$21,000

Direct labor

8,000

Direct labor

15,400

Factory overhead

6,080

Factory overhead

11,704

Total

$24,280

Total

$48,104

Job 303

 

Job 304

 

Direct materials

$23,000

Direct materials

$14,200

Direct labor

18,000

Direct labor

12,200

Factory overhead

-

Factory overhead

-

Required:

Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.

a. Direct and indirect materials used.

b. Direct and indirect labor used.

c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).

d. Completion of Jobs 301 and 302.

Date

Account Titles & Explanation

Ref

Debits

Credits

 

Factory Overhead

 

 

 

 

Work in Process

 

68,400.00

 

 

   Materials

 

 

 

 

Work in Process

 

53,600.00

 

 

Factory Overhead

 

 

 

 

   Wages Payable

 

 

 

 

Work in Process

 

 

 

 

   Factory Overhead

 

 

 

 

Finished Goods

 

 

 

 

   Work in Process

 

 

 

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Cost Accounting: Determine the direct and indirect labor used
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