Question

In: Accounting

2. Allenton Company is a manufacturing firm that uses job-order costing. The company applies overhead to...

2. Allenton Company is a manufacturing firm that uses job-order costing. 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 31,000 machine-hours and incur $248,000 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased, $412,419. b. Raw materials were requisitioned for use in production, $409,000 ($388,000 direct and $21,000 indirect). c. The following employee costs were incurred: direct labor, $145,210; indirect labor, $61,356; and administrative salaries, $198,450. d. Factory utility costs, $14,815. e. Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling, general, and administrative activities. f. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 29,067 machine-hours (Hint: you need to compute a predetermined overhead rate to apply overhead). g. The cost of goods manufactured for the year was $783,075. h. Sales for the year totaled $1,107,000 and the costs on the job cost sheets of the goods that were sold totaled $768,990. Required (4 Points): Prepare the appropriate journal entry for each of the items above.

Solutions

Expert Solution

Pre-determined OH rate: Etsimated OH/ Estimated DLH
248000 /31000 = $ 8 per MH
Journal entries:
S.no. Accounts title and explanation Debit $ Credit$
a. Raw material Inventory Dr. 412419
    Accounts payable Account 412419
b. Work in Process inventory Dr. 388000
Manufacturing Overheads Dr. 21000
    Raw material inventory Account 409000
c. Work in process Inventory Dr. 145210
Manufacturing OH Account Dr. 61356
Selling and admin OH Account Dr. 198450
     Wages payable account 405016
d. Manufacturing Overheads Account Dr. 14815
     Cash account 14815
e. Manufacturing OH Account Dr. 114000
Selling and admin OH Account Dr. 7000
     Accumulated depreciation 121000
f. Work in process Inventory Account Dr. 232536
     Manufacturing Overheads Account (29067*8) 232536
g. Finished Goods inventory Dr. 783075
   Work in process inventory Account 783075
h. Accounts receivable Dr. 1107000
    Sales revenue 1107000
Cost f Goods sold Account Dr. 768990
     Finished Goods inventory Account 768990

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

ABC, Corp. is a manufacturing firm that uses job-order costing. The company applies overhead to jobs...
ABC, Corp. is a manufacturing firm that uses job-order costing. 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 50,000 machine-hours and incur $450,000 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased, $325,000. b. Raw materials were requisitioned for use in production, $175,000 ($100,000 direct and $75,000 indirect). c. The following employee costs...
Job-Order Costing Ace Custom Jewelry Company uses a job-order cost system. The company applies manufacturing overhead...
Job-Order Costing Ace Custom Jewelry Company uses a job-order cost system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor hours. The estimated MOH was $135,000 for the year and the estimated direct labor hours were 15,000 hours. In May, Job #378 was completed. Direct materials totaled $8,500. Total labor costs were $14,000 at $16 per hour. At the end of the year, it was determined that the company worked 16,000 direct labor...
The Collins Company uses a job-order costing system and applies manufacturing overhead cost to jobs on...
The Collins Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of materials used in production. At the beginning of the most recent year, the following estimates were made as a basis for computing the predetermined overhead rate for the year: Manufacturing overhead cost: $200,000 Direct materials cost: $160,000 The following transactions took place during the year (all purchases and services were acquired on account): a.) Raw materials purchased: $86,000....
NH Company uses a job-order costing system. The company applies manufacturing overhead to jobs using a...
NH Company uses a job-order costing system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor-hours. Last year, manufacturing overhead and direct labor-hours were estimated at $80,000 and 16,000 hours respectively, for the year. In June, Job #300 was completed. Materials costs on the job totaled $1,500 and labor costs totaled $2,400 at $6 per hour. At the end of the year, it was determined that the company worked 15,000 direct labor-hours for...
Garcia Manufacturing uses a job order costing system and applies overhead to production on the basis...
Garcia Manufacturing uses a job order costing system and applies overhead to production on the basis of direct labour hours. In 2013, costs and production data were estimated to remain the same as 2012 with total manufacturing overhead costs estimated to be $1,050,000, direct labour costs estimated to be $35 an hour, and direct labour hours to be 20,000. On January 1, 2013, Job No. 50 was the only job in process. The production data incurred prior to January 1...
Garcia Manufacturing uses a job order costing system and applies overhead to production on the basis...
Garcia Manufacturing uses a job order costing system and applies overhead to production on the basis of direct labour hours. In 2013, costs and production data were estimated to remain the same as 2012 with total manufacturing overhead costs estimated to be $1,050,000, direct labour costs estimated to be $35 an hour, and direct labour hours to be 20,000. On January 1, 2013, Job No. 50 was the only job in process. The production data incurred prior to January 1...
1. Benner Company uses a job-order costing system and applies manufacturing overhead to jobs using a...
1. Benner Company uses a job-order costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor hours. Manufacturing overhead and direct labor hours were estimated at $66,000 and 22,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled $4,923 and labor costs totaled $2,325 at $7.50 per hour (310 hours worked on this job). At the end of the year, it was determined that the company worked 23,975...
Overhead Application and Job-Order Costing Heurion Company is a job-order costing firm that uses a plantwide...
Overhead Application and Job-Order Costing Heurion Company is a job-order costing firm that uses a plantwide overhead rate based on direct labor hours. Estimated information for the year is as follows: Overhead $789,000 Direct labor hours 100,000 Heurion worked on five jobs in July. Data are as follows: Job 741 Job 742 Job 743 Job 744 Job 745 Balance, July 1 $29,870 $55,215 $27,880 $0 $0 Direct materials $25,500 $39,800 $14,450 $13,600 $8,420 Direct labor cost $61,300 $48,500 $28,700 $24,500...
2) Allenton Company is a manufacturing firm that uses job-order costing. At the beginning of the...
2) Allenton Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company's inventory balances were as follows: Raw materials: $26,000 Work in process $47,000 Finished goods $133,000 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 31,000 machine-hours and incur $248,000 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw...
hardwood company uses a job order costing system that applies overhead cost to jobs on the...
hardwood company uses a job order costing system that applies overhead cost to jobs on the basis of machine hours. The companys predetermined overhead rate of $2.50 Per machine hour was based on the cost formula that estimates $237,500 of total manufacturing overhead for an estimated activity level of 95,000 machine hours. 1. Manufacturing Overhead Maintenance                          36,000                        ???                (a) Indirect Materials                    9,500 Indirect Labor                         75,000 Utilities                                    44,000 Insurance                                8,500 Depreciation                            56,000 Balance:                                    ???         Work in Process: Direct Materials              860,000 Direct...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT