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Cost of Job

Raymond Company produces pipes for concert-quality organs. Each job is unique. In April 2009, it competed all outstanding orders, and then in May 2009, it worked on only two jobs M1 and M2

Direct Materials Job M1 = $75,000
Direct Materials Job M2 = $50,000

Direct Manufacturing Labor for Job M1 = 275,000
Direct Manufacturing labor for Job M2 = 200,000

Direct manufacturing labor is paid at the rate of $25 per hour. Manufacturing overhead costs are allocated at a budgeted rate of $20 per direct maunfacturing labor-hour. Only job M1 was completed in May.

1. Compute the total cost for Job M1
2. 1,500 pipers were produced for Job M1. Calculate the cost per pipe.
3. Prepare the journal entry transferring Job M1 to finished goods.
4. What is the ending balance in the work-in-progress account?

Solution Summary

Calculation of total cost of job, cost per pipe, journal entry showing transferring Job M1 to finished goods, calculation of ending balance in the work-in-progress account. Step by Step solution provided.