Wilkins Manufacturing uses a job order cost accounting system. On December 1, the company has a balance in Work in Process Inventory of $5,500 and two jobs in process: Job No. 429, $3,000 and Job No. 430, $2,500. During December, a summary of source documents reveals the following:
|
For
|
Materials Requisition Slips
|
Labor Time Tickets
|
|
Job No. 429
|
$ 3,200
|
$ 4,100
|
|
Job No. 430
|
2,600
|
3,400
|
|
Job No. 431
|
3,400
|
4,200
|
|
Job No. 432
|
3,000
|
4,000
|
|
General Use
|
1,000
|
1,500
|
|
$13,200
|
$17,200
|
Wilkins Manufacturing applies manufacturing overhead to jobs at an overhead rate of 70% of direct labor cost. Job No. 429 is completed during the month.
Instructions
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Prepare summary journal entries to record the requisition slips, time tickets, the assignment of manufacturing overhead to jobs, and the completion of Job No. 429. Show computations.
(b) Answer the following questions.
1. What is the balance in Work in Process Inventory at December 31?
2. If Wilkins Manufacturing incurred $6,000 of manufacturing overhead in addition to indirect materials and indirect labor, was overhead over- or underapplied in December and by how much?
3. Without regard to your answer in (2) above, assume manufacturing overhead was underapplied in December. How would this amount be reported in the company's financial statements at December 31?