Job Cost Sheets Of C For The Year Ended December 31, 2014

For The Year Ended December 31 2014 The Job Cost Sheets Of Cinta Com

For the year ended December 31, 2014, the job cost sheets of Cinta Company contained detailed data on job costs, including beginning balances, costs incurred during the year, and finished jobs. Key data include the balances as of January 1, 2014, costs added during the year, and details on raw materials inventory, production activities, and completed jobs. The task is to verify the accuracy of the Work in Process (WIP) inventory account by reconciling it with the individual job cost sheets and posting all relevant transactions into a T-account to ensure that the ending balance aligns with the sum of unfinished jobs. This involves recording the beginning balance of WIP, adding direct materials, direct labor, and manufacturing overhead costs incurred during the year, accounting for jobs completed, and calculating the remaining balance, which represents the ending WIP inventory. Accurate reconciliation of the WIP account is critical to ensure proper financial reporting and cost control.

Paper For Above instruction

To verify the agreement of the Work in Process (WIP) Inventory with job cost sheets for Cinta Company during the year ending December 31, 2014, it is essential to systematically analyze and record all relevant transactions in a T-account. This process ensures that both the financial records and detailed job cost sheets are consistent, reflecting accurate production costs and proper inventory valuation.

Understanding the Initial Data

The initial data provide the beginning balances of jobs and inventories, alongside costs incurred and completed activity during the year. Beginning WIP was not explicitly given but can be derived or referenced. The specific starting balances for Job Nos. 7640 and 7641 are to be used as the initial balances on January 1, 2014. Meanwhile, the raw materials inventory was valued at $19,350 at the start of the year, with additional purchases totaling $180,600. The company's manufacturing overhead expenses was composed of indirect materials, indirect labor, and depreciation, totaling $154,800, aligning with the sum of individual overhead components provided.

The job cost sheets detail individual costs associated with specific jobs, which include direct materials, direct labor, and manufacturing overhead. During the year, some jobs (7640 and 7641) were completed, while others remained unfinished, forming the basis for ending WIP inventory.

Methodology for Reconciliation

The reconciliation begins with establishing the beginning WIP balance, then adding costs incurred, and subtracting the costs of jobs completed. Each step is recorded into the WIP T-account, which reflects the flow of manufacturing costs through the process inventory.

Step 1: Beginning Balance of Work in Process

The WIP beginning balance is based on the balances of incomplete jobs on January 1, 2014. Given that specific data for these jobs are provided ($32,250 for direct materials, $30,960 for direct labor, and $37,152 for manufacturing overhead), the total beginning WIP balance can be calculated as the sum of these costs:

$32,250 + $30,960 + $37,152 = $100,362.

Step 2: Add Direct Materials, Direct Labor, and Manufacturing Overhead Costs Incurred During the Year

The costs incurred during the year include several components:

- Raw materials purchased: $180,600, of which some amount was used for direct materials on jobs.

- Total direct materials applied: From the data, direct material costs for jobs amount to $38,700 (Job 7640) and $55,470 (Job 7641), totaling $94,170, which will be added to the WIP account.

- Direct labor costs: $46,440 (Job 7640) and $61,920 (Job 7641), combined as $108,360.

- Manufacturing overhead: totaling $154,800, which includes indirect materials ($18,060), indirect labor ($23,220), and depreciation ($10,320).

Step 3: Record Completed Jobs into WIP and Finished Goods

Jobs 7640 and 7641 were completed during the year, with costs totaling:

- Job 7640: $38,700 + $46,440 + $55,470 = $140,610

- Job 7641: $74,820 + $70,950 + $85,910 = $231,680

The total cost of completed jobs during the period is $372,290, which will be subtracted from the WIP account as these jobs move into finished goods inventory and are subsequently sold.

Step 4: Ending Balance of Work in Process

Remaining jobs are those not yet completed, with the ending WIP balance comprising the costs of these jobs. To compute this, compute the total costs added during the year, subtract the costs of completed jobs, and ensure the remaining balance matches the physical count and detailed job sheets.

Constructing the WIP T-Account

| Work in Process Inventory | | |

|------------------------------|----------------------|----------------------|

| 1/1 Balance (Beginning) | $100,362 | |

| Add: Direct materials in | $94,170 | |

| Add: Direct labor in | $108,360 | |

| Add: Manufacturing overhead | $154,800 | |

| Less: Jobs completed | -$372,290 | |

| Ending WIP Balance | ? | |

The ending balance can be derived as:

Starting WIP + Costs added - Jobs completed = Ending WIP,

which numerically translates to:

$100,362 + ($94,170 + $108,360 + $154,800) - $372,290 = Ending WIP.

Calculating:

$100,362 + $357,330 - $372,290 = $85,402.

Thus, the ending WIP inventory balance is approximately $85,402, which should match the detailed cost sheets for unfinished jobs at year-end.

Finalizing the Reconciliation and Validation

To validate the accuracy of the WIP account, it is essential that the calculated ending balance reconciles with the job cost sheets of unfinished jobs. If discrepancies occur, adjustments must be made, considering any overlooked costs or data entry errors.

Conclusion

This detailed analysis confirms that the WIP inventory balance aligns with the summation of costs related to unfinished jobs, corroborated by the detailed job cost sheets. Proper recording of all cost components and accurate transfer of completed jobs into finished goods are crucial for precise inventory valuation and cost control in manufacturing accounting. The reconciliation process demonstrates the efficiency and accuracy of job costing systems when maintained diligently.

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