Question

Alameda Products uses a job-order costing system. The company’s inventory balances on April 1, the start of it’s fiscal year, were as follows:

Raw Materials: $37,000

Work-in-Progress:$70,000

Finished Goods:$58,000

Manufacturing Overhead:$0

During the year the following occurred:

1.Raw materials purchased on account: $191,0002.

Raw materials issued from the storeroom for use in production: $120,000

(80% direct materials and 20% indirect materials).

3.Employee salaries and wages paid in cash were as follows: Direct Labor-$180,000; Indirect Labor: $66,000;

Selling, General and Administrative Expenses (SG&A period cost) $117,000

4.Utility Costs incurred in the factory and paid in cash (manufacturing overhead--indirect cost): $26,000.

5.Advertising Costs incurred and paid in cash (period cost): $132,000.

6.Depreciation: $80,000 (75% related to factory assets and considered manufacturing overhead; 25% related to corporate assets and considered a period type depreciation expense).

7.Estimated Manufacturing Overhead applied to jobs in W-I-P at a pre-determined overhead rate of $5.00 per unit produced. 30,000 units produced in the current year.

8.Costs of goods transferred from W-I-P to Finished Goods totaled $400,000.

9.Sales for the year totaled $1,475,000 and were all in cash. The total cost to manufacture these goods was $420,000 and were transferred from Finished Goods to Cost of Goods Sold.

10.Paid Income Tax Expense in cash totaling $200,000.

Question 2.

A. Prepare all 11 required journal entries (see below) in proper debit/credit journal entry form.

B. Post all journal entries to related t-accounts.

Answer 1

+ Under applied overhead calculated is the balance in figure in Manufacturing overhead account.