Question

Oriole Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $21,000, direct labor $12,600, and manufacturing overhead $16,800. As of January 1, Job 49 had been completed at a cost of $94,500 and was part of finished goods inventory. There was a $15,750 balance in the Raw Materials Inventory account. During the month of January, Oriole Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $128,100 and $165,900, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $94,500 on account. 2. Incurred factory labor costs of $73,500. Of this amount $16,800 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: indirect materials $17,850; indirect labor $21,000; depreciation expense on equipment $12,600; and various other manufacturing overhead costs on account $16,800. 4. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,500 $5,250 51 40,950 26,250 52 31,500 21,000

Calculate the predetermined overhead rate for 2020, assuming Oriole Company estimates total manufacturing overhead costs of $882,000, direct labor costs of $735,000, and direct labor hours of 21,000 for the year. Predetermined overhead rate %

Prepare the journal entries to record (1) the purchase of raw materials, (2) the factory labor costs incurred, and (3) the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3)

Prepare the journal entries to record the assignment of (1) direct materials, (2) direct labor, and (3) manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3)

Answer 1

predetermined overhead rate
Estimated manufacturing overhead/total estimated direct labor costs
882000/735000
120.00%

No	Account titles & Explanations				Debit	Credit
1)	Raw materials inventory				94,500
	Accounts payable					94,500
2)	Factory labor				73,500
	Factory wages payable					56,700
	employer payroll taxes payable					16,800
3)	manufacturing overhead				68,250
	raw materials inventory					17,850
	Factory labor					21,000
	Accumulated depreciation					12,600
	Accounts payable					16,800
No	Account titles & Explanations				Debit	Credit
1)	Work in process inventory				82,950
	Raw materials inventory					82,950
2)	work in process inventory				52,500
	Factory labor					53,000
3)	Work in process inventory				63000
	manufacturing overhead					63,000

working

job no 50
Date		Direct	direct	MOH
		materials	labor
beg.		21,000	12,600	16,800
Jan		10,500	5,250	6,300
		31,500	17,850	23,100
cost of completed job
Direct materials				31,500
direct labor				17,850
MOH				23,100
total cost				72,450
job no 51
Date		Direct	direct	MOH
		materials	labor
Jan		40,950	26,250	31,500
		40,950	26,250	31,500
cost of completed job
Direct materials				40,950
direct labor				26,250
MOH				31500
total cost				98,700
Job 52
Date		Direct	direct	MOH
		materials	labor
Jan		31,500	21,000	25,200