Posted by Holly on Sunday, March 27, 2011 at 7:14pm.
For the year ended December 31, 2010, the job cost sheets of DeVoe Company contained the following data.
7640 Balance 1/1 $25,000 $24,000 $28,800 $77,800
Current year's costs 30,000 36,000 43,200 109,200
7641 Balance 1/1 11,000 18,000 21,600 50,600
Current year's costs 43,000 48,000 57,600 148,600
7642 Current year's costs 48,000 55,000 66,000 169,000
Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.
Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.
Job No. 7640 and Job No. 7641 were completed during the year.
Job Nos. 7638, 7639, and 7641 were sold on account for $530,000.
Manufacturing overhead incurred on account totaled $120,000.
Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $20,000, and depreciation on factory machinery $8,000.
Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. Hint: Use a single T account for Work in Process Inventory. Calculate each of the following, then post each to the T account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.
Work in Process Inventory
1/1 Balance 128400 Completed Work 386200
Work in process balance $
Unfinished job No. 7642 $ 169000
Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.
Account/Description Debit Credit
Cost of goods sold
Determine the gross profit to be reported for 2010. (List amounts from largest to smallest eg 10, 5, 3, 2.)
Sales $ 530000
Cost of goods sold
Add: Job 7641 $ 199200
Job 7639 92000
Job 7638 87000
Less: Overapplied overhead
Gross profit $
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