Problem:
Suppose a company is seasonal and completed all of its jobs at the end of the previous month. This month two orders came in, Order X001 and Order X002. The company uses normal costing.
|
X001
|
X002
|
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Direct materials
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$55,000
|
$40,000
|
|
Direct labor
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$200,000
|
$150,000
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Direct labor is paid at a rate of $20 per hour. Manufacturing overhead costs are allocated at a budgeted rate of $30 per direct labor-hour. Order001 was completed prior to the end of the month. Delivery will be made in the second week of the following month.
Required
Question 1: Calculate the total cost for Order X001
Question 2: Prepare the journal entry for requisitioning the direct materials for Order X001
Question 3: Prepare the journal entry transferring Order X001 to finished goods.
Question 4: Calculate the ending balance of Work-in-Process Inventory.
Question 5: Prepare the journal entry recognizing the sales and expense of Order X001 once the delivery is made, assuming the sales price is $700,000.
Note: Please show how to work it out.