Lowder, Inc., builds custom conveyor systems for warehouses and distribution cen- ters. During the month of July, the following occurred:
a. Materials were purchased on account for $44,200.
b. Materials totaling $27,000 were requisitioned for use in production-$12,500 for Job #703 and the remainder for Job #704.
c. Direct labor payroll for the month was $28,200, with an average wage of $15 per hour. Job #703 required 780 direct labor hours; Job #704 required 1,100 direct labor hours.
d. Actual overhead of $19,950 was incurred and paid.
e. Overhead is charged to production at the rate of $10 per direct labor hour.
f. Job #703 was completed and transferred to finished goods.
g. Job #704, which was started during July, remained in process at the end of the month.
h. Job #700, which had been completed in May, was sold on account for cost plus 40 percent.
Beginning balances as of July 1 were as follows:
|
Materials
|
$ 6,070
|
|
Work in Process (for Job #703)
|
13,000
|
|
Finished Goods (for Job #700)
|
6,240
|
Required
1. Prepare the journal entries for events (a) through (e) above.
2. Prepare simple job-order cost sheets for Jobs #703 and #704.
3. Prepare the journal entries for events (f) and (h) above.
4. Calculate the ending balances of:
a. Materials
b. Work in Process
c. Finished Goods.