9 Do it! Review Prepare journal entries for manufacturing costs (SO 2) Do it! 20

Question

9 Do it! Review Prepare journal entries for manufacturing costs (SO 2) Do it! 20-1 During the current month, Brady Company incurs the following manufacturing costs: a. Purchased raw materials of $13,000 on account. b. Incurred factory labor of $40,000. Of that amount, $31,000 relates to wages payable and $9,000 relates to payroll taxes payable. e. Factory utilities of $3,100 are payable, prepaid factory property taxes of $2,400 have expired and depreciation on the factory building is $9,500. Prepare journal entries for each type of manufacturing cost. (Use a summary entry to recosd manufacturing overhead.) rk in process.Do it! 20-2 Francisco Company is working on two job orders. The job cost sheets show the (SO 3, 4) following: Direct materials Direct labor Manufacturing overhead Job 201 $7,200 4,000 5,200 Job 202 $9,000 6,000 7,800 Prepare the three summary entries to record the assignment of costs to Work in Process from the data on the job cost sheets. During the current month, Weller Corporation completed Job 310 and Job 312. Prepare entries for completion and sale of jobs. Do it! 203 Job 310 cost $60,000 and Job 312 cost $40,000. Job 312 was sold on account for $90,000. Journalize the entries for the completion of the two jobs and the sale of Job 312. (SO 5) Do it! 204 cost. During the month, FreeFall incurred $100,000 of factory labor costs, of which $85,000 is direct labor and $15,000 is indirect labor. Actual overhead incurred was $120,000. Apply man" a raring overhead For FreeFall Company, the predetermined overhead rate is 150% of direct labor and determine under or overapplication. Compute the amount of manufacturing overhead applied during the month. Determine the amount of under- or overapplied manufacturing overhead. (SO 6)

Explanation / Answer

20-1 (a) Raw Materials Inventory 13,000 Accounts Payable 13,000 (Purchases of raw materials on account) (b) Factory Labor 40,000 Factory Wages Payable 31,000 Employer Payroll Taxes Payable 9,000 (To record factory labor costs) (c) Manufacturing Overhead 15,000 Accumulated Depreciation 9,500 Utilities Payable 3,100 Prepaid Property Taxes 2,400 (To record overhead costs) 20-2 The three summary entries are: Work in Process Inventory ($7,200 + $9,000) 16,200 Raw Materials Inventory 16,200 (To assign materials to jobs) 20-3 Work Process Inventory ($4,000 + $6,000) 10,000 Factory Labor 10,000 (To assign labor to jobs) Work in Process Inventory ($5,200 + $7,800) 13,000 Manufacturing Overhead 13,000 (To assign overhead to jobs) Finished Goods Inventory 100,000 Work in Process Inventory 100,000 (To record completion of Job 310, costing $60,000 and Job 312, costing $40,000) Accounts Receivable 90,000 Sales 90,000 (To record sale of Job 312) Cost of Goods Sold 40,000 Finished Goods Inventory 40,000 (To record cost of goods sold for Job 312) 20-4 Manufacturing overhead applied = 150% X $85,000 = $127,500 Overapplied manufacturing overhead = $120,000 – $127,500 = $7,500

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