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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Entry for jobs completed; cost of unfinished jobs

The following account appears in the ledger prior to recognizing the jobs completed in January:

  Work in Process
Balance, January 1 $ 72,000
Direct material 390,000
Direct labor 500,000
Factory overhead 250,000

Jobs finished during January are summarized as follows

Job 210 $200,000
Job 216 288,000
Job 224 $225,000
Job 230 436,800

a. Journalize the entry to record the jobs completed.

b. Determine the cost of the unfinished jobs at January 31.

(a)

To determine

Jobs Completed:

When jobs are completed, all the product costs like direct material, direct labor, factory overhead are added up to compute the cost of job completed. The total is then divided by number of units produced to determine the cost per unit.

To record: the journal entry for completed jobs.

Explanation

The journal entry to record the jobs completed is as follows:

Date Account titles and Explanation Debit
($)
Credit
($)
Jan-31 Finished goods Table (2) 1,149,800  
      Work in process   1,149,800
  (Record completion of job)    

(b)

To determine
cost of unfinished jobs at January 31.

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