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hollynicole
Mar 27, 2011, 04:31 PM
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.








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










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










Determine the gross profit to be reported for 2010. (List amounts from largest to smallest e.g. 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 $