Christian Wolf Enterprises keeps several artists and interns on staff to create special made to order blown glass artwork for high income clients. The company operates on a calendar year and uses job order costing since each job is unique.

The company uses a plantwide predetermined overhead rate of 150% of direct labor costs.

ACTION REQUIRED: PREPARE THE JOURNAL ENTRIES FOR EACH BELOW

a. Record the journal entry for the materials issued; Update Job Cost Sheet (round to the nearest cent)

Review the materials requisitioned (below) for the new product you have been commissioned to make for the Jano family.  

Desciption	Units Requisitioned	Unit Cost	Total
Silicon dioxide	35	8	280
Alumina	1	10	10
Magnesia	2	12	24
Boron oxide	0.5	19	9.50
Lead oxide	0.75	25	18.75
Soda	0.1	20	2
Lime	0.15	21	3.15
Cobalt	0	22	-
Silver	0.31	35	10.85
Copper	0.1	28	2.80
Manganese	0.05	18	0.90
Chorium	0.03	25	0.75
			362.70

b. Assume you worked all week on this one product. An analysis of Time Cards for the Employees showed the following:

Direct Laborer (you)à assume 40 hours @ $25 per hour

Supervisor $45,000 annual salary (break this down into $870 per week)

Assume FICA rates are 6.2% + 1.45% = 7.65% and Employee Income Tax Withholding is at 10% of wages. Assume FUTA and SUTA rates of 4% and 1% respectively on the first $10,000 of wages.

Action Items: Record the journal entry for the wages; Update Job Cost Sheet (round to the nearest cent)

c. Other Miscellaneous activities includes:

Paid Utilities on the factory building of $2,000

Monthly depreciation on plant assets were calculated. On an annual basis, the company writes off (rounded to the nearest dollar):

Factory buildings                       $2,500

Machinery and Equipment        $7,100

Office Equipment                      $12,000

Adjust the balance of the prepaid insurance account, which represents a two-year premium for a fire insurance policy covering the factory building and machinery. It was paid on the last day of the preceding month and became effective on October 1. (Round your journal entry to the nearest dollar.)

Action Items:Record the journal entry for each of the above

d.Calculate the applied overhead for each job. Record the journal entry. Update Job Cost Sheet. Record the journal entry for the job you completed (the Catt Family Project). Action Items:Record the journal entry for each of the above

e. Jobs Jones and Xiong were delivered to customers during the month. Sale price is 50% markup over cost. Action Items:Record the journal entry for each of the above

Additional Information:

USE EXHIBIT 1 TO UPDATE JOB COST SHEET

EXHIBIT 1. POST-CLOSING TRIAL BALANCE
Cash	5,795
Accounts Receivable	50,000
Finished Goods	29,000
Work in Process	-
Prepaid Insurance	7,200
Building	100,000
Machinery and Equipment	50,000
Office Equipment	60,000
Accumulated Depreciation		137,000
Accounts Payable		10,000
FICA Tax Payable		3,000
FUTA and SUTA Payable		300
Employee Income Tax Payable		5,000
Capital Stock		50,000
Retained Earnings		114,090
	319,390	319,390

Exhibit 2 shows subsidiary ledgers for the Finished Goods Account (a piece for the Jones family and a piece for the Xiong family). You are also given detail of the Materials accounts.

EXHIBIT 2	FINISHED GOODS INVENTORY
	Jones Piece	Xiong Piece	Total
Direct Materials	5000	10,000	15,000
Direct Labor	3000	7000	10,000
Factory Overhead	1000	3000	4000
	9000	20,000	29,000

Direct Materials Inventory
Description	Units	Unit Cost	Total
Silicon Dioxide	1499	8	11,992
Alumina	150	10	1,500
Magnesia	150	12	1,800
Boron oxide	60	19	1,140
Lead oxide	25	25	625
Soda	2	20	40
Lime	2	21	42
Cobalt	2	22	44
Silver	2	35	70
Copper	2	28	56
Manganese	2	18	36
Chorium	2	25	50
			17,395

Answer rating: 100% (QA)

a Journal entry for the materials issued Materials Inventory 36270 Accounts Payable 36270 b Journal ... View the full answer