Swifty Fabricators produces protective covers for smart phones. Since the covers must be customized to each smart phone model, Swifty uses a job order costing system. On September 1, the company reported the following inventory balances: Direct Materials $31,500
Work in Process $152,000
Finished Goods $260,000

During September, the following events occurred:

1. Swifty purchased direct materials costing $3,708,000 on account.
2. Swifty used $432,000 in direct materials in production.
3. Swifty’s employees clocked 22,000 direct labor hours at an average wage rate of $13.23 per direct labor hour.
4. The company incurred $182,000 in manufacturing overhead, including $18,000 in indirect labor costs.
5. Using direct labor hours as the application base, the company applied $166,000 of manufacturing overhead to jobs worked on in September.
6. The company completed production on jobs costing $858,000.
7. The company delivered jobs costing $1,078,000 to customers.
1. Calculate the ending September balance of the Direct Materials, Work in Process, and Finished Goods Inventory accounts.
2. Calculate total manufacturing costs for September.

Required 1 Balances :

Direct Materials =  $432,000

Work in Process = $183,060

Finished Goods =   $40,000

Required 2 total manufacturing costs for September :

Total manufacturing costs = $905,060

Explanation:

Ending September balance of the Direct Materials,

Raw Materials T - Account

Debit :

Opening Balance                      $31,500

Purchases                            $3,708,000

Totals                                   $3,739,500

Credit :

Ending Balance                  $3,307,500

Work In Process                    $432,000

Totals                                   $3,739,500

Ending September balance of Work in Process,

Work in Process T - Account

Debit :

Opening Balance                  $152,000

Raw Materials                       $432,000

Labor Cost                             $291,060

Overheads Applied               $166,000

Totals                                    $1,041,060

Credit :

Ending Balance                     $183,060

Transfer to Finished Goods $858,000

Totals                                    $1,041,060

Ending September balance Finished Goods .

Finished Goods T - Account

Debit :

Opening Balance                         $260,000

Transfer from Work In Process   $858,000

Totals                                            $1,118,000

Credit :

Ending Balance                              $40,000

Trading Account                        $1,078,000

Totals                                            $1,118,000

Calculation of Total Manufacturing Cost

Raw Materials                                                    $432,000

Labor Cost                                                          $291,060

Overheads Incurred                                           $182,000

Total Manufacturing Cost                                 $905,060

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