Michael Ortiz is a contractor specializing in custom-built jacuzzis.On May 1,2010,his ledger contains the following data.Raw Materials Inventory $30,000 Work in Process Inventory 12,200 Manufacturing Overhead 2,500 (dr.)The Manufacturing Overhead account has debit totals of $12,500 and credit totals of $10,000. Subsidiary data for Work in Process Inventory on May 1 include:Job Cost Sheets Job Manufacturing by Customer Direct Materials Direct Labor Overhead Taylor $2,500 $2,000 $1,400 Baker 2,000 1,200 840 Joiner 900 800 560 $5,400 $4,000 $2,800During May, the following costs were incurred: (a) raw materials purchased on account $4,000,(b) labor paid $7,600,(c) manufacturing overhead paid $1,400. A summary of materials requisition slips and time tickets for the month of May reveals the following.Job by Customer Materials Requisition Slips Time Tickets Taylor $ 500 $ 400 Baker 600 1,000 Joiner 2,300 1,300 Smith 1,900 2,900 5,300 5,600 General use 1,500 2,000 $6,800 $7,600Overhead was charged to jobs on the basis of $0.70 per dollar of direct labor cost. The jacuzzis for customers Taylor, Baker, and Joiner were completed during May. Each jacuzzi was sold for $12,000 cash.Instructions (a) Prepare journal entries for the May transactions: (i) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (ii) assignment of raw materials,labor,and overhead to production;and (iii) completion of jobs and sale of goods. (b) Post the entries to Work in Process Inventory. (c) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs. (d) Prepare a cost of goods manufactured schedule for May.
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