Question

The following information relates to the manufacturing operations of O'Shaughnessy Mfg. Co. during the month of March. The company uses job order costing.

a. Purchases of direct materials during the month amount to $52,000. (All purchases were made on account.)

b. Materials requisitions issued by the Production Department during the month total $58,000.

c. Time cards of direct workers show 2,000 hours worked on various jobs during the month, for a total direct labor cost of $31,000.

d. Direct workers were paid $27,000 in March.

e. Actual overhead costs for the month amount to $32,000 (for simplicity, you may credit Accounts Payable).

f. Overhead is applied to jobs at a rate of $18 per direct labor hour.

g. Jobs with total accumulated costs of $120,000 were completed during the month.

h.During March, units costing $130,000 were sold for $210,000. (All sales were made on account.)

Required:Prepare general journal entries to summarize each of these transactions in the company's general ledger accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

a. Record the purchases of direct materials during March.

b. Record the materials placed into production during March.

c. Record the direct labor costs applicable to production.

d. Record the direct labor payrolls paid in March.

e. Record the actual overhead costs in March.

f. Record the overhead applied to production during March.

g. Record the cost of completed jobs in March.

h. Record the entry to summarize credit sales in March.

9Record the cost of units sold during March.

Answer 1

	Account Titles	Debit	Credit
a	Raw Material Inventory	$         52,000
	Accounts Payable		$         52,000
b	Work in Process Inventory	$         58,000
	Raw Material Inventory		$         58,000
c	Work in Process Inventory	$         31,000
	Wages Payable		$         31,000
d	Wages Payable	$         27,000
	Cash		$         27,000
e	Manufacturing Overhead	$         32,000
	Accounts Payable		$         32,000
f	Work in Process Inventory	$         36,000
	Manufacturing Overhead		$         36,000
g	Finished Goods Inventory	$     1,20,000
	Work in Process Inventory		$      1,20,000
h	Accounts Receivable	$     2,10,000
	Sales Revenue		$      2,10,000
	Cost of Goods Sold	$     1,30,000
	Finished Goods Inventory		$      1,30,000