Question:
Derby Music Company specializes in producing and packaging compact discs (CDs) for the music recording industry. Derby uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations:
a. Materials purchased on account, $15,500.
b. Materials requisitioned and labor used:
|
|
|
Factory
|
|
|
Materials
|
Labor
|
|
Job No. 100
|
$2,650
|
$1,770
|
|
Job No. 101
|
1,240
|
650
|
|
Job No. 102
|
980
|
420
|
|
Job No. 103
|
3,420
|
1,900
|
|
Job No. 104
|
1,000
|
500
|
|
Job No. 105
|
2,100
|
1,760
|
|
For general factory use
|
450
|
650
|
c. Factory overhead costs incurred on account, $2,700.
d. Depreciation of machinery, $1,750.
e. Factory overhead is applied at a rate of 70% of direct labor cost.
f. Jobs completed: Nos. 100, 101, 102, 104.
g. Jobs 100, 101, and 102 were shipped, and customers were billed for $8,100, $3,800, and $3,500, respectively.
Instructions
1. Journalize the entries to record the transactions identified above.
2. Determine the account balances for Work in Process and Finished Goods.
3. Prepare a schedule of unfinished jobs to support the balance in the work in process account.
4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.