Blink, Inc. is a manufacturer that uses a job-order costing system. At the beginning of April 2020,
Question:
Blink, Inc. is a manufacturer that uses a job-order costing system. At the beginning of April 2020, Blink had two jobs in process, Job V and Job W. During April 2020, Blink continued working on Job V and W, but also began working on 3 additional jobs: Job X, Job Y, and Job Z. Costs for these five jobs are listed below:
Job V | Job W | Job X | Job Y | Job Z | |
Balances on April 1, 2020: | |||||
Direct materials | $7,000 | $11,600 | $0 | $0 | $0 |
Direct labor | $3,100 | $5,940 | $0 | $0 | $0 |
Applied OH (75% of DL) | $2,325 | $4,455 | $0 | $0 | $0 |
Costs incurred during April | |||||
Direct materials | $29,575 | $34,995 | $21,530 | $37,410 | $9,005 |
Direct labor | $16,400 | $20,500 | $9,620 | $18,020 | $2,980 |
Applied OH (75% of DL cost) | $? | $? | $? | $? | $? |
Status on April 30, 2020 | Finished (unsold) | Finished (sold) | In process | Finished (unsold) | In process |
Blink provided additional information for April:
- Job W was sold to a customer on account for $135,000 in April
- Raw materials inventory (direct and indirect), beginning balance on 4/1/2020: $39,440
- Raw materials (direct and indirect) purchased in April 2020: $126,950
- Finished goods inventory, beginning balance on 4/1/2020: $0
- Actual Factory OH costs incurred in April: Indirect materials = $4,033; Indirect labor = $7,085; Factory rent = $7,200; Factory utilities = $780; Factory equipment depreciation = $31,500
- The predetermined OH rate is 75% of DL costs.
- Determine the April 30th balances of the firm’s three inventory accounts:
- Raw Materials Inventory account
- Work in Process (WIP) Inventory account (X,Z)
- Finished Goods Inventory account
- Prepare journal entries for the month of April to record the below transactions (make sure to use proper journal entry formatting and include a brief description of each entry).
1.Transfer of Jobs V, W, and Y to Finished Goods Inventory.
2. Cost of goods sold for Job W.
3. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account (Assume the amount is not material).
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen