Question

The following information relates to a manufacturing company that produces special machines made by order.
•The company has 3 outstanding jobs: Job A320, Job A321, and Job A322.

•$180,000 worth of materials (direct and indirect) were purchased on credit.

•Materials costing $135,000 were sent to the manufacturing plant floor. $50,000 were issued to Job A320 and $10,000 to Job A321 and $60,000 to Job A322, $15,000 of indirect materials were issued.

•Total payroll for the period was $82,000. Job A320 incurred direct labor costs of $19,000, Job A321 incurred directlabor costs of $3,000, Job A322 incurred direct labor costs of $25,000, Salary for sales & marketing $20,000, Salary for General & Administrative $10,000, and $5,000 of indirectlabor was also incurred.

•Manufacturing overhead costs were expected at $65,100.The plant-wide cost allocation base for overhead is machine-hours. 2,480 machine-hours were expected for all jobs.

•Job A320 used 1000 machine-hours. Job A321 used 200 machine-hours and Job A322 used 1200 machine-hours

•The company has4 lofts of the same level, 1 loft used as the Office, 1 loft used as the Store/Showroom and 2 loftsused as Workshop for manufacturing their products. Total depreciation for the 4 loftsis $ 52,000. For the office $13,000, for Showroom also $13,000 and the rest is the depreciation for workshop of $26,000•Other selling expenses amounted $ 10,000, other General Administrative is 4,000 and Other manufacturing overhead incurred amounted to $19,100

•At the end of the semester, Job A320 was finished and soldfor $114,800, Job A321 was not finished and needed to be processed further.Job A322 was finished and taken out of the Workshop, but are still under inspectionfor final QC before finally stored in theStore/Showroom.

•Over/Under allocated overhead are booked to COGS
Required:

1. Record all the transactions in general journal

2. Calculate the production costs each of those jobs

Answer 1

1	General Journal	Debit	Credit
	Raw materials	180,000
	Accounts Payable		180,000
	Work in process	120,000
	Manufacturing overhead	15,000
	Raw materials		135,000
	Work in process	47,000
	Manufacturing overhead	5,000
	Salaries expense - Sales and Marketing	20,000
	Salaries expense - General & Administrative	10,000
	Salaries and Wages payable		82,000
	Work in Process	63,000
	Manufacturing overhead ($65,100 x 2,400/2,480)		63,000
	Manufacturing overhead	26,000
	Depreciation Expense - General & Administrative	13,000
	Depreciation Expense - Selling & Marketing	13,000
	Accumulated Depreciation		52,000
	Manufacturing overhead	19,100
	Other Expense - General & Administrative	4,000
	Other Expense - Selling & Marketing	10,000
	Accounts Payable		33,100
	Finished Goods	211,750
	Work in Process		211,750
	Accounts Receivable	114,800
	Sales		114,800
	Cost of Goods Sold	95,250
	Finished Goods		95,250
	Cost of Goods Sold	2,100
	Manufacturing Overhead		2,100
2		Job A320	Job A321	Job A322
	Material	50,000	10,000	60,000
	Labor	19,000	3,000	25,000
	Overhead	26,250	5,250	31,500
	Total Cost	95,250	18,250	116,500