In: Accounting
Widmer Watercraft’s predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company’s production activities during May 2015 follows. |
a. | Purchased raw materials on credit, $220,000. |
b. | Materials requisitions record use of the following materials for the month. |
Job 136 | $ | 49,500 | |
Job 137 | 32,000 | ||
Job 138 | 19,600 | ||
Job 139 | 23,000 | ||
Job 140 | 7,200 | ||
Total direct materials | 131,300 | ||
Indirect materials | 21,500 | ||
Total materials used | $ | 152,800 | |
c. | Paid $15,750 cash to a computer consultant to reprogram factory equipment. |
d. | Time tickets record use of the following labor for the month. These wages were paid in cash. |
Job 136 | $ | 12,200 | |
Job 137 | 10,500 | ||
Job 138 | 38,100 | ||
Job 139 | 39,200 | ||
Job 140 | 3,800 | ||
Total direct labor | 103,800 | ||
Indirect labor | 24,500 | ||
Total | $ | 128,300 | |
e. | Applied overhead to Jobs 136, 138, and 139. |
f. | Transferred Jobs 136, 138, and 139 to Finished Goods. |
g. | Sold Jobs 136 and 138 on credit at a total price of $545,000. |
h. | The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). |
Depreciation of factory building | $ | 69,000 | |
Depreciation of factory equipment | 36,500 | ||
Expired factory insurance | 10,000 | ||
Accrued property taxes payable | 35,000 | ||
i. |
Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. |
Required: | |
1. |
Prepare a job cost sheet for each job worked on during the month. |
|
2. |
Prepare journal entries to record the events and transactions a through i. |
3/Prepare T-accounts for each of the following general ledger accounts, each of which started the month with a zero balance: Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Factory Payroll, Factory Overhead, Cost of Goods Sold. Post the journal entries from Part 2 to the following T-accounts
Raw Materials InventoryWork in Process InventoryEnd.bal.End.bal.Factory OverheadFinished Goods InventoryEnd.bal.End.bal.Cost of Goods SoldEnd.bal.