# Financial and Managerial Accounting: 2-1B Weinrich Manufacturing uses a job order cost system

Financial and Managerial Accounting
Problem 2-1B Job-order Costing
Weinrich manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor hours. On January 1, 2011 job no 25 was the only job in process. The costs incurred prior to Jan 1 on this job were as follows: direct materials \$10,000; direct labor \$6,000; manufacturing overhead \$9,000. Job no. 23 had been completed at a cost of \$42,000 and was part of finished good inventory. There was a \$5,000 balance in the raw materials inventory count.
During the month of Jan, the company began production on jobs 26 and 27, and completed jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for \$63,000 and \$74,000, respectively.
The following additional events occurred during the month.
1. Purchased additional raw materials of \$40,000 on account.
2. incurred factor labor costs of \$31,500. Of this amount \$7,500 related to employee payroll taxes.
3. Incurred manufacturing overhead costs as follows: indirect materials \$10,000; indirect labor \$7,500; depreciation expense \$12,000; and various other manufacturing overhead costs on account \$11,000
4. assigned direct materials and direct labor to jobs as follows
Job No. Direct Materials Direct Labor
25 5,000 3,000
26 17,000 12,000
27 13,000 9,000
5.) The company uses direct labor hrs as the activity base to assign overhead. direct labor hrs incurred on each job were as follows. job no 25, 200; job no 26, 800; and job no 27, 600.Instructions:
a.) Calculate the predetermined overhead rate for the year 2011, assuming Weinrich manufacturing estimates total manufacturing overhead costs of \$480,000, direct labor costs of \$300,000 and direct labor hours of 20,000 per yr.
b.) Open jobs cost sheets for jobs 25,26,27. Enter the jan 1 balances on the job cost sheet for job no. 25.
c.) Prepare the journal entries to record the purchase of raw materialism the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of Jan.
d.) Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all coasts to the job cost sheets as necessary,
e.) Total the job cost sheets for any jobs completed during the month, Prepare the journal entry to record the completion of any jobs during the month.
f.) Prepare the journal entry to record the sale of any jobs during the month.
g.) What is the balance in the work in process inventory account at the end of the month? What does this balance consist of?
h.) What is the amount of over or underapplied overhead?