TruCut Mower Company manufactures a variety of gasoline-powered
TruCut Mower Company manufactures a variety of gasoline-powered mowers for discount hardware and department stores. TruCut uses a job cost system and treats each customer's order as a separate job. The primary mower components (motors, chassis, and wheels) are purchased from three different suppliers under long-term contracts that call for the direct delivery of raw materials to the production floor as needed. When a customer's order is received, a raw materials purchase order is electronically placed with suppliers. The purchase order specifies the scheduled date that production is to begin as the delivery date for motors and chassis; the scheduled date production is to be completed is specified as the delivery date for the wheels. As a consequence, there are no raw materials inventories; raw materials are charged directly to Work-in-Process upon receipt. Upon completion, goods are shipped directly to customers rather than transferred to finished goods inventory. At the beginning of July 2009, TruCut had the following work-in-process inventories:
Job 365 ………………………… $20,000
Job 366 ………………………… 16,500
Job 367 ………………………… 15,000
Job 368 ………………………… 9,000
Total …………………………… $60,500
During July, the following activities took place:
Started Jobs 369, 370, and 371.
Ordered and received the following raw materials for specified jobs:
Incurred July manufacturing payroll:
Direct labor Job 365 ………………………… $ 500
Job 366 ……………………………………… 3,200
Job 367 ……………………………………… 3,400
Job 368 ……………………………………… 4,160
Job 369 ……………………………………… 1,300
Job 370 ……………………………………… 2,620
Job 371 ……………………………………… 2,000
Total ………………………………………… 17,180
Indirect labor ……………………………….. 3,436
Total ………………………………………… $20,616
Incurred additional manufacturing overhead costs for July:
Manufacturing supplies purchased on account and used ……………….. $ 2,800
Depreciation on factory fixed assets ………………..…………………… 6,000
Miscellaneous payables ………………..………………..……………….. 5,100
Total ………………..………………..………………..………………….. $13,900
Applied manufacturing overhead using a predetermined rate based on predicted annual overhead of $190,000 and predicted annual direct labor of $200,000.
Completed and shipped Jobs 365 through 370.
Required
Prepare a complete analysis of all activity in Work-in-Process. Be sure to show the beginning and ending balances, all increases and decreases, and label each item. Provide support information on decreases with job cost sheets.