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Stellar Inc 4200

Price: $2.50

Stellar Inc. is a construction company specializing in custom patios. The patios
are constructed of concrete, brick, fiberglass, and lumber, depending upon customer
preference. On June 1, 2014, the general ledger for Stellar Inc. contains the following

Raw Materials Inventory   4,200
Work in Process Inventory   5,540
Manufacturing overhead applied  32,640
Manufacturing overhead incurred  31,650

Subsidiary data for Work in Process Inventory on June 1 are as follows.

Cost Element  Gannon   Rosenthal   Linton 
Direct materials  600  800  900
Direct labor  320  540  580
Manufacturing overhead  400  675  725
   1,320  2,015  2,205

During June, raw materials purchased on account were $4,900, and all wages were
paid. Additional overhead costs consisted of depreciation on equipment $700 and miscellaneous
costs of $400 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Customer Job  Materials Requirement Slips   Time Tickets 
Gannon   800  450
Koss   2,000  800
Rosenthal   500  360
Linton   1,300  1,200
Gannon   300  390
   4,900  3,200
General use   1,500  1,200
   6,400  4,400

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost.
The patios for customers Gannon, Rosenthal, and Linton were completed during June and
sold for a total of $18,900. Each customer paid in full.

(a) Journalize the June transactions: (i) for purchase of raw materials, factory labor
costs incurred, and manufacturing overhead costs incurred; (ii) assignment of direct
materials, labor, and overhead to production; and (iii) completion of jobs and sale of
(b) Post the entries to Work in Process Inventory.
(c) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
(d) Prepare a cost of goods manufactured schedule for June.

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