Question

Jurvin Enterprises is a manufacturing company with no beginning inventories. A subset of the transactions it recorded during a recent month is shown below.

Purchased $94,000 in raw materials for cash.
$89,000 in raw materials were used in production. Of this amount, $78,000 was direct materials and the remainder was indirect materials.
Paid employees $132,000 cash. Of this amount, $112,000 was direct labor and the remainder was indirect labor.
Paid $143,000 for additional manufacturing overhead costs.
Applied manufacturing overhead of $152,000 to production using the company’s predetermined overhead rate.
All of the jobs in process at the end of the month were completed.
All of the completed jobs were shipped to customers.
Any underapplied or overapplied overhead was closed to Cost of Goods Sold.
Required:
Post the above transactions to T-accounts.
Calculate the adjusted cost of goods sold for the period.

Answer 1

To analyze the provided transactions and calculate the adjusted cost of goods sold for Jurvin Enterprises, we will first post each transaction to the appropriate T-accounts. We'll focus on the most relevant accounts which include Raw Materials, Work in Process (WIP), Manufacturing Overhead, Cost of Goods Sold (COGS), and Finished Goods. Here are the main T-accounts for this analysis:

### T-Accounts

**1. Raw Materials**
```
Debit | Credit
-----------------------|----------------
Raw Materials Purchased 94,000 |
Material Used | 89,000
|
Balance | 5,000
```
**Ending Balance in Raw Materials Account:** $5,000

**2. Work in Process (WIP)**
```
Debit | Credit
-----------------------|----------------
Direct Materials Used 78,000 |
Direct Labor 112,000 |
Applied Overhead 152,000 |
|
Cost of Goods Manufactured | 342,000
```
**Cost of Goods Manufactured:**
- Total WIP debit = Direct Materials (78,000) + Direct Labor (112,000) + Applied Overhead (152,000) = 342,000

**3. Manufacturing Overhead**
```
Debit | Credit
-----------------------|----------------
Indirect Materials Used | 11,000 (from raw materials)
Indirect Labor | 20,000 (from paid employees)
Actual Overhead Costs 143,000 |
| Applied Overhead 152,000
| COGS (underapplied/overapplied)
```
- Calculate underapplied/overapplied overhead:
- Total actual overhead = $143,000
- Total applied overhead = $152,000
- Underapplied/Overapplied = $143,000 - $152,000 = -$9,000 (which means overapplied).

**4. Cost of Goods Sold (COGS)**
```
Debit | Credit
-----------------------|----------------
Cost of Goods Manufactured 342,000 |
|
Overapplied Overhead 9,000 |
```
- Recorded COGS = $342,000
- Since the overhead is overapplied by $9,000, we must subtract this from COGS when calculating adjusted COGS.

### Calculation of Adjusted Cost of Goods Sold
- **Unadjusted COGS:** $342,000
- **Overapplied Overhead:** -$9,000
- **Adjusted COGS:**
\[
\text{Adjusted COGS} = 342,000 - 9,000 = 333,000
\]

### Summary
The adjusted cost of goods sold for Jurvin Enterprises for the period is **$333,000**.