PR 19-4A Big Wave Company manufactures surf boards in a wide variety of sizes and styles. The following incomplete ledger accounts refer to transactions that are summarized for July:
Materials
July 1 Balance 30,000
July 31 Requisitions (A)
31 Purchases 120,000
Work in Progress
July 1 Balance (B)
July 31 Completed jobs (F)
31 Materials (C)
31 Direct labor (D)
31 Factory overhead applied (E)
Finished Goods
July 1 Balance 0
July 31 Cost of goods sold (G)
31 Completed jobs (F)
Wages Payable July 31
Wages incurred 120,000
Factory Overhead
July 1 Balance 22,000
July 31 Factory overhead applied (E)
31 Indirect labor (H)
31 Indirect materials 16,000
31 Other overhead 95,000

In addition, the following information is available: a. Materials and direct labor were applied to six jobs in July:
Job No. Style Quantity Direct Materials Direct Labor
No. 21 X-10 200 $ 20,000 $15,000
No. 22 X-20 400 34,000 26,000
No. 23 X-50 200 14,000 8,000
No. 24 T-20 250 30,000 25,000
No. 25 X-40 180 22,000 17,500
No. 26 T-10 140 8,000 4,500
Total 1,370 $128,000 $96,000

b. Factory overhead is applied to each job at a rate of 160% of direct labor cost.

c. The July 1 work in progress balance consisted of two jobs, as follows:
Work in Process Job No. Style July 1 Job 21 X-10 $ 6,000 Job 22 X-20 16,000 Total $22,000
d. Customer jobs completed and units sold in July were as follows:
Completed Units Sold Job No. Style in July in July No. 21 X-10 X 160 No. 22 X-20 X 320 No. 23 X-50 0 No. 24 T-20 X 210 No. 25 X-40 X 150 No. 26 T-10 0

1. Determine the missing amounts associated with each letter. Provide supporting calculations by completing a table with the following headings: July 1 Cost of Job Work in Direct Direct Factory Total Unit Units Goods No. Quantity Progress Materials Labor Overhead Cost Cost Sold Sold

2. Determine the July 31 balances for each of the inventory accounts and factory overhead.

1. Supporting calculations:

| | |July 1 | | | | | | |Cost of |
| |Quan- |Work in |Direct |Direct |Factory |Total |Unit |Units |Goods |
|Job No. |tity |Process |Materials |Labor |Overhead |Cost |Cost |Sold |Sold |
|No. 21 | 200 | $ 6,000 |$ 20,000 | $ 15,000 | $ 24,000 | $ 65,000 | $325.00 | 160 |$ 52,000 |
|No. 22 | 400 | 16,000 | 34,000 | 26,000 | 41,600 | 117,600 | $294.00 | 320 | 94,080 |
|No. 23 | 200 | | 14,000 | 8,000 | 12,800 | 34,800 | | 0 | 0 |
|No. 24 | 250 | | 30,000 | 25,000 | 40,000 | 95,000 | $380.00 | 210 | 79,800 |
|No. 25 | 180 | | 22,000 | 17,500 | 28,000 | 67,500 | $375.00 | 150 | 56,250 |
|No. 26 | 140 | | 8,000 | 4,500 | 7,200 | 19,700 | | 0 | 0 |
|Total | 1,370 | $ 22,000 |$ 128,000 | $96,000 | $ 153,600 | $ 399,600 | | |$ 282,130 |

A. $144,000. Materials applied to production in July + indirect materials. ($128,000 + $16,000) B. $22,000. From table above and problem. C. $128,000. From table above. D. $96,000. From table above. E. $153,600. ($96,000 × 1.6) and from table above. F. $345,100. ($65,000 + $117,600 + $95,000 + $67,500) G. $282,130. From table above. H. $24,000. Wages incurred less direct labor applied to production in July. ($120,000 – $96,000)

2. July balances: Materials $ 6,000 ($30,000 + $120,000 – $144,000) Work in Process $54,500* ($34,800 + $19,700, Job 23 and Job 26) Finished Goods $62,970** ($345,100 – $282,130) Factory Overhead $ 3,400 Dr. underapplied ($22,000 + $24,000 +$16,000+ $95,000 – $153,600)

* or ($22,000 + $128,000 + $96,000 + $153,600 – $345,100)

** Units in Unit Total Job No. Inventory Cost Cost

Job 21 40 $325 $13,000 Job 22 80 294 23,520 Job 24 40 380 15,200 Job 25 30 375 11,250 Total $62,970