P20-2A


For the year ended December 31, 2010, the job cost sheets of DeVoe Company contained the following data.
Job Number
Explanation
Direct Materials
Direct Labor
Manufacturing Overhead
Total
Costs

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

Other data:

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.







Incorrect.

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
Direct materials
Direct labor
Manufacturing overhead
12/31 Balance

Work in process balance $

Unfinished job No. 7642 $ 169000







Incorrect.

Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.
Account/Description Debit Credit
Manufacturing overhead
Cost of goods sold







Incorrect.

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

378200
Less: Overapplied overhead


Gross profit $

151800

To prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work, we need to calculate the balance in the Work in Process Inventory account.

Work in Process Inventory:
1/1 Balance: $128,400
Direct Materials:
Direct Labor:
Manufacturing Overhead:
Completed Jobs: $386,200
12/31 Balance:

To calculate the balance in the Work in Process Inventory account, we need to add the direct materials, direct labor, and manufacturing overhead to the 1/1 balance, and subtract the completed jobs.

1/1 Balance: $128,400
Direct Materials: (Not given)
Direct Labor: (Not given)
Manufacturing Overhead: (Not given)
Completed Jobs: $386,200
12/31 Balance:

Unfortunately, the direct materials, direct labor, and manufacturing overhead amounts are not provided in the given information, so we cannot calculate the 12/31 balance of the Work in Process Inventory account.

Next question, please.

To prove the agreement of Work in Process Inventory with the job cost sheets pertaining to unfinished work, you need to create a T account for Work in Process Inventory and calculate the beginning balance, direct materials, direct labor, manufacturing overhead, and completed jobs.

1) Beginning balance: The beginning balance of Work in Process Inventory is given as $128,400.

2) Direct materials: Direct materials are the materials directly used in the production of a specific job. The total direct materials for all jobs are provided in the job cost sheets. From the given data, you can calculate the direct materials for each job as follows:

Job No. 7640: $25,000 (balance 1/1) + $30,000 (current year's costs) = $55,000
Job No. 7641: $11,000 (balance 1/1) + $43,000 (current year's costs) = $54,000
Job No. 7642: $48,000 (current year's costs) = $48,000

Therefore, the total direct materials for all jobs is $55,000 + $54,000 + $48,000 = $157,000.

3) Direct labor: Direct labor is the labor directly involved in the production of a specific job. The total direct labor for all jobs is provided in the job cost sheets. From the given data, you can calculate the direct labor for each job as follows:

Job No. 7640: $24,000 (balance 1/1) + $36,000 (current year's costs) = $60,000
Job No. 7641: $18,000 (balance 1/1) + $48,000 (current year's costs) = $66,000
Job No. 7642: $55,000 (current year's costs) = $55,000

Therefore, the total direct labor for all jobs is $60,000 + $66,000 + $55,000 = $181,000.

4) Manufacturing overhead: Manufacturing overhead includes indirect materials, indirect labor, and depreciation on factory machinery. The total manufacturing overhead for all jobs is provided in the job cost sheets. From the given data, you can calculate the manufacturing overhead for each job as follows:

Job No. 7640: $28,800 (balance 1/1) + $43,200 (current year's costs) = $72,000
Job No. 7641: $21,600 (balance 1/1) + $57,600 (current year's costs) = $79,200
Job No. 7642: $66,000 (current year's costs) = $66,000

Therefore, the total manufacturing overhead for all jobs is $72,000 + $79,200 + $66,000 = $217,200.

5) Completed jobs: The completed jobs are the jobs that have been finished during the year. From the given data, Job No. 7640 and Job No. 7641 were completed during the year. Therefore, the cost of completed jobs is $109,200 (current year's costs for Job No. 7640) + $148,600 (current year's costs for Job No. 7641) = $257,800.

Now, you can post these calculations to the Work in Process Inventory T account:

Work in Process Inventory (T account)
1/1 Balance: $128,400
Direct materials: $157,000
Direct labor: $181,000
Manufacturing overhead: $217,200
Completed jobs: $257,800
12/31 Balance: __________ (To be calculated)

To find the 12/31 balance, add the beginning balance and all the values calculated above:

$128,400 + $157,000 + $181,000 + $217,200 + $257,800 = $941,400

Therefore, the 12/31 balance for Work in Process Inventory is $941,400.