Reference no: EM133085013
Question - Job Order Costing - John and Sam went to college together, and both majored in computer science. A few years ago, they formed a computer company called Synergy, Inc. Synergy Inc. is a manufacturer of enterprise management systems. Assume that the company has a division that does custom jobs for large clients. Production costs are accounted for using a job cost system. Suppose that at the beginning of the month, raw materials inventory totaled $9,000, manufacturing supplies amounted to $2,800, and two jobs were in process Job 455 with assigned costs of $14,750 and Job 456 with assigned costs of $4,800, and there were no finished goods inventories. There was no under-applied or over-applied manufacturing overhead on the first day of the month.
The following information summarized the month's manufacturing activities:
Synergy purchased raw material costing $60,000 on the account. Synergy purchased manufacturing supplies costing $10,000. The manager process requisitioned materials for the various jobs in the process. The requisitioned material needed to complete Job 456 was $3,200. Synergy started two new jobs and assigned those numbers 457 and 458. The requisitioned direct materials for 457 was $16,000, and 458 was $13,500.
Direct labor costs for the month were incurred at a rate of $15.00 per hour. Job 455 needed 700 hours. Job 456 needed 1,650 hours. Job 457 needed 2,000 hours. Job 458 needed 960 hours.
Manufacturing supplies used for the month totaled $7,500. Synergy recognized depreciation on factory assets of $6,000. The company incurred a miscellaneous manufacturing overhead cost of $20,750 on the account. The company applied manufacturing overhead at a rate of $7.00 per direct labor hour. The following jobs were completed in the month: Jobs 455, 456, and 457. The following jobs were delivered to customers: Jobs 455 and 456.
Required -
1. Prepare in good form a ledger or T account showing the flow of costs through the Work-in-Process, Finished Goods, and Costs of Goods Sold accounts.
2. Show the job costs details for each job to support the balances in Work-in-Process, Finished Goods, and Costs of Goods Sold accounts.
3. Is Manufacturing Overhead over or underapplied? What is the journal entry to close the Manufacturing Overhead account?
4. Prepare in good form a Statement of Costs of Goods Manufactured for the month.