Entries for Direct Labor and Factory Overhead Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses...

Entries for Direct Labor and Factory Overhead

Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses a job order cost system. The time tickets from June jobs are summarized as follows:

Job 11-101	$2,240
Job 11-102	1,520
Job 11-103	1,200
Job 11-104	1,830
Job 11-105	1,200
Factory supervision	1,040

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $30 per direct labor hour. The direct labor rate is $17 per hour.

a. Journalize the entry to record the factory labor costs. If an amount box does not require an entry, leave it blank.

	Work in Process
	Factory Overhead
	Wages Payable

b. Journalize the entry to apply factory overhead to production for June. If an amount box does not require an entry, leave it blank.

	Work in Process
	Factory Overhead

Solutions

Expert Solution

Journal Entry
	Account Titles	Debit	Credit
a)	Work in Process Inventory ($17,680 + $135,830)	$153,510
	Factory Overheads		$17,680
	Wages Payable		$135,830
	(To record the allocation of factory labor costs)

Journal Entry
	Account Titles	Debit	Credit
b)	Work in Process	$270,900
	Factory Overheads		$270,900
	(To record the application of factory overheads to jobs)

Working notes:
Direct labor costs:	Hours (a)	Rate (b)	*Total Cost (ab)**
Job 11-101	2,240	$17	$38,080
Job 11-101	1,520	$17	$25,840
Job 11-101	1,200	$17	$20,400
Job 11-101	1,830	$17	$31,110
Job 11-101	1,200	$17	$20,400
Total direct labor costs			$135,830

Factory supervison	1,040	$17	$17,680


Factory Overhead Costs	Hours (a)	Rate (b)	*Total Cost (ab)**
Job 11-101	2,240	$30	$67,200
Job 11-101	1,520	$30	$45,600
Job 11-101	1,200	$30	$36,000
Job 11-101	1,830	$30	$54,900
Job 11-101	1,200	$30	$36,000
Factory supervison	1,040	$30	$31,200
Total factory overheads applied			$270,900

ekkarill92 answered 1 month ago

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