Question

AmaZing company has its job-costing system including two categories of direct costs: direct materials and direct manufacturing labor and one indirect-cost pool. Manufacturing overhead allocated at a budgeted $31 per machine-hour in 2016. The following data (in thousands) show operating costs for 2016.

Materials control, Jan 1, 2016                                                                        20

WIP Control, Jan 1, 2016                                                                                 9

Finished Goods Control, Jan 1, 2016                                                               10

Finished Goods Control, Dec 31, 2016                                                           11

Materials and Supplies purchased on credit                                                   154

Direct materials used                                                                                       145

Indirect materials issued to various production departments                        19

Direct manufacturing labor                                                                             100

Indirect manufacturing labor by various production departments                43

Depreciation on plant                                                                                     28

Miscellaneous manufacturing overhead (utilities..)                                       13

Cost of goods sold                                                                                            294

Manufacturing overhead allocated 3,000 machine-hours

1. Calculate Materials control on Dec 31, 2016                    

2. Prepare journal entries. What is the cost of goods manufactured?

3. Calculate the amount of under- or overallocated manufacturing overhead

Answer 1

Answer 1.
Material Control
Beg. Bal.	20.00	145.00	2
1	154.00	19.00	3
End. Bal.	10.00

Answer 2.
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
1	Material Control	154.00
	Accounts Payable Control		154.00
	(To record the raw material purchased)
2	WIP Control	145.00
	Material Control		145.00
	(To record the material issued for production)
3	Manufacturing Overhead Control	19.00
	Material Control		19.00
	(To record the indirect material used)
4	WIP Control	100.00
	Manufacturing Overhead Control	43.00
	Wages Payable Control		143.00
	(to record the labor used)
5	Manufacturing Overhead Control	28.00
	Accumulated Depreciation - Plant & Equip.		28.00
	(To record the depreciation on plant)
6	Manufacturing Overhead Control	13.00
	Various Liabilities		13.00
	(to record the misc. manufacturing overhead)
7	WIP Control	93.00
	Manufacturing Overhead Allocated		93.00
	(To record the manufacturing overhead applied)
	Manufacturing Overhead Allocated = 3,000 mach Hrs x $31
	Manufacturing Overhead Allocated = $93,000
8	Finished Goods Control	298.00
	WIP Control		298.00
9	Accounts Receivable / Cash	XXX
	Sales Revenue		XXX
	(To record the sales)
	Note - No Figures are Given
10	Cost of Goods Sold	294.00
	Finished Goods Inventory		294.00
	(To record the cost of goods sold)
11	Manfacturing Overhead Allocated	93.00
	Cost of Goods Sold	10.00
	Manufacturing Overhead Control		103.00
	(To record the underallocated overhead)

Statement of Cost of Goods Manufactured
Direct Material
Raw Material Inventory, Beginning	20.00
Material Purchased	154.00
Total Direct Material Available for Prouction	174.00
Raw Material Inventory, Ending	(29.00)
Cost of Direct Materials Used in Productions		145.00
Direct Labor		100.00
Manufacturing Overhead Applied		93.00
Total Manufacturing Costs		338.00
Add: WIP Inventory, Beginning		9.00
Sub-total		347.00
Less: WIP Inventory, Ending		(48.00)
Cost of Goods Manufactured		299.00
Answer 3.
Actual Manufacturing Overhead	103.00
Applied MOH	93.00
Underallocated Overhead	10.00