Cost of Goods Sold

1.The weekly time tickets  indicate the following distribution of labor hours for three direct labor employees:

  Job 301 Job 302 Job 303 Improvement
Tom Couro 10 15 13 2
David Clancy 12 12 14 2
Jose Cano 11 13 15 1

The direct labor rate earned per hour by the three employees is as follows:

Tom Couro $32
David Clancy 36
Jose Cano 28

The process improvement category includes training, quality improvement, and other indirect tasks.

A. Journalize the entry on July 15 to record the factory labor costs for the week. (3 Journal Entries)
B. Assume that Jobs 301 and 302 were completed but not sold during the week and that Job 303 remained incomplete at the end of the week. How would the direct labor costs for all three jobs be reflected on the financial statements at the end of the week?


Cost of Goods Sold Work In Process Finished Goods Factoy Overhead
Job 301          
Job 302          
Job 303          




2.Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $8,000 of indirect materials and $12,400 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:

Job 301  
Direct materials $10,000
Direct labor 8,000
Factory overhead 6,000
Total $24,000
Job 302  
Direct materials $20,000
Direct labor 17,000
Factory overhead 12,750
Total $49,750


Job 303  
Direct materials $24,000
Direct labor 18,000
Factory overhead
Job 304  
Direct materials $14,000
Direct labor 12,000
Factory overhead



  Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles.

  A. Direct and indirect materials used.
  B. Direct and indirect labor used.
  C. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).
  D. Completion of Jobs 301 and 302.




3.Tybee Industries Inc. uses a job order cost system . The following data summarize the operations related to production for January 2016, the first month of operations:

  a. Materials purchased on account, $29,800.
  b. Materials requisitioned  and factory labor used:
Job Materials Factory Labor
301 $ 2,960 $2,775
302 3,620 3,750
303 2,400 1,875
304 8,100 6,860
305 5,100 5,250
306 3,750 3,340
For general factory use 1,080 4,100


  c. Factory overhead costs incurred on account, $5,500.
  d. Depreciation of machinery and equipment, $1,980.
  e. The factory overhead rate is $54 per machine hour. Machine hours used:
Job Machine Hours
301 25
302 36
303 30
304 72
305 40
306 25
Total 228



  f. Jobs completed: 301, 302, 303 and 305.
  g. Jobs were shipped and customers were billed as follows: Job 301, $8,250; Job 302, $11,200; Job 303, $15,000.
A. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on January 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles. (18 journal entries)
B. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.


C. Prepare a schedule of unfinished jobs to support the balance in the work in process account.*
D. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.*

  * Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.
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