In: Accounting
Weinrich Manufacturing uses a job order cost system and applies overhead to |
Production on the basis of direct labor hours. On January 1, 2016, Job No. 25 was the only job in process |
with total costs of $25,000. Estimated overhead costs are $480,000, direct labor costs are |
$300,000 and direct labor hours are 20,000 for the year. |
a. Calculate the predetermined overhead rate. |
b. Prepare the following entries: |
1. Purchased raw materials of $50,000 on account. |
2. Incurred factory labor costs of $31,500 with $8,000 pertaining |
to employee payroll taxes. |
3. Request materials for jobs: No. 25 - $5,000, No. 26 -$17,000, |
No. 27 - $13,000, along with $10,000 of indirect materials. |
4. Assigned direct labor to jobs: No. 25 - $3,000 (for 200 hours) , No. 26 - $12,000 |
(for 800 hours), No. 27 - $9,000 (for 600 hours), and indirect labor of $7,500. |
5. Incurred machinery depreciation of $12,000, and other manufacturing |
costs paid of $11,000. |
6. Charged overhead to production. |
7. Job No. 25 and 27 were finished. |
8. Job No. 27 was sold for $63,000 on account. |
h. Cleared the overhead account. |