Question

The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing:

Purchased $55,000 in materials on account.

Issued $2,800 in supplies from the materials inventory to the production department.

Paid for the materials purchased in transaction (1).

Issued $26,800 in direct materials to the production department.

Incurred wage costs of $55,000, which were debited to Payroll, a temporary account. Of this amount, $14,800 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $40,200 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll.

Recognized $23,000 in fringe benefit costs, incurred as a result of the wages paid in (5).

Analyzed the Payroll account and determined that 60 percent represented direct labor; 30 percent, indirect manufacturing labor; and 10 percent, administrative and marketing costs.

Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $33,700.

Applied overhead on the basis of 170 percent of direct labor costs.

Recognized depreciation of $18,550 on manufacturing property, plant, and equipment.

Required:

a. Prepare journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. The following balances appeared in the accounts of Apex Manufacturing:

	Beginning			Ending
Materials Inventory	$	57,525			—
Work-in-Process Inventory		14,325			—
Finished Goods Inventory		63,550		$	52,400
Cost of Goods Sold		—			105,275

Prepare T-accounts to show the flow of costs during the period.

Answer 1

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