Question

Seton Corporation is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning Balance Ending Balance Raw materials $ 14,000 $ 22,000 Work in process $ 27,000 $ 9,000 Finished Goods $ 62,000 $ 77,000 The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 33,000 machine-hours and incur $231,000 in manufacturing overhead cost. The following transactions were recorded for the year:

a. Raw materials were purchased, $315,000.

b. Raw materials were requisitioned for use in production, $307,000 ($281,000 direct and $26,000 indirect).

c. The following employee costs were incurred: direct labor, $377,000; indirect labor, $96,000.

d. Factory utility costs, $10,000.

e. Depreciation for the year was $120,000.

f. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 34,000 machine-hours. Hint: calculate POHR and then apply to actual activity

3. Prepare a cost of goods manufactured schedule.

4. Based on the cost of goods manufactured result, prepare journal entry (g) (and T-account entries) to move completed jobs from Work in Process to Finished Goods

computer writing please

Answer 1

Solution 3:

Predetermined overhead rate = Estimated overhead / Estimated machine hours = $231,000 / 33000 = $7 per machine hour

Actual manufacturing overhead incurred = Indirect materials + Indirect labor + Factory utility cost + Depreciation

= $26,000 + $96,000 + $10,000 + $120,000 = $252,000

Manufacturing overhead applied = 34000 * $7 = $238,000

Underapplied overhead = $252,000 - $238,000 = $14,000

Seton Corporation
Schedule of Cost of goods manufactured
Particulars		Amount
Direct material consumed:
Beginning material inventory	$14,000.00
Add: Purchases	$315,000.00
Less: Ending material inventory	$22,000.00
Total material used	$307,000.00
Less: Indirect material	$26,000.00
Direct material used		$281,000.00
Direct labor		$377,000.00
Manufactuing Overhead applied		$238,000.00
Total manufacturing costs incurred in december		$896,000.00
Add: Beginning WIP		$27,000.00
Total manufacturing costs		$923,000.00
Less: Ending WIP		$9,000.00
Cost of goods manufactured		$914,000.00

Solution 4:

Journal Entries - Seton Corporation
Event	Particulars	Debit	Credit
g	Finished goods inventory Dr	$899,000.00
	To Work In Process		$899,000.00
	(Being units completed transferred to finished goods inventory)

Finished Goods Inventory (Partial)
Event	Debit	Event	Credit
g	$899,000.00

Work In Process Inventory (Partial)
Event	Debit	Event	Credit
		g	$899,000.00