E2-1 – The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer’s payroll taxes for the factory payroll are 8,000. The fringe benefits to be paid by the employer on this payroll are $6,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor:
a)    Prepare the entry to record the factory labor cost for the month of January
b)    Prepare the entry to assign factory labor to production.

E2-2– Stine Company uses a job order cost system. On May 1st, the company has a balance in Work in Process Inventory of 3,500 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,500. During May, a summary of source documents reveals the following.

Job Number     Materials            Requisition Slips     Labor         Time Tickets

429    $2,500     $1,900
430    3,500    3,000
431    4,400                   $10,400    7,600                   $12,500
General use    800    1,200
$11,200     $13,700

Stine Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Job No. 429 completed during the month.
a)    Prepare summary journal entries to record (i) the requisition slips, (ii) the time tickets, (iii) the assignment of manufacturing overhead to jobs, and (iv) the completion of Job No. 429.
b)    Post the entries to Work in Process Inventory, and prove the agreement of the control account with the job cost sheet. (Use a T-account.)

BE2-1 Knox Company begins operations on January 1. Because all work is done to customer specifications, the company decides to use a job order cost system. Prepare a flow-chart of a typical job order system with arrows showing the flow of costs. Identify the eight transactions.
BE2-2  During January, its first month of operations, Knox Company accumulated the following manufacturing costs: raw materials $4,000 on account, factory labor $6000 of which $5,200 relates to factory wages payable and $800 relates to payroll taxes payable, and utilities payable $2000. Prepare separate journal entries for each type of manufacturing cost.
BE2-3In January, Knox Company requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,400, Job 3 $700, and general factory use $600. Prepare a summary journal entry to record raw materials used.

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