Problem 2-3A Source documents, journal entries, and accounts in job order costin
ID: 2338788 • Letter: P
Question
Problem 2-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3 The following information applies to the questions displayed belowJ Widmer Watercraft's predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company's production activities during May 2015 follows. a. Purchased raw materials on credit, $240,000 b. Materials requisitions record use of the following materials for the month. Job 136 Job 137 Job 133 Job 139 Job 140 $48,000 33,500 19,200 22,800 7,200 Total direct materials Indirect materials 130,700 20,500 Total materials used $151,200 c. Paid $15,500 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cosh. Job 136 Job 137 Job 138 Job 139 Job 140 $12,200 10,600 37,900 39,000 4,000 Total direct labor Indirect labor 103,700 26,500 Total $130,200 e. Applied overhead to Jobs 136,138, and 139. f Transferred Jobs 136, 138, and 139 to Finished Goods. g. Sold Jobs 136 and 138 on credit at a total price of $540,000. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building Depreciation of factory equipment Expired factory insurance Accrued property taxes payable $68,000 38,000 11,000 35,500 i Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor costExplanation / Answer
Solution:
Journal Entries
Transaction
General Journal
Debit
Credit
a.
Raw materials
$240,000
Accounts Payable
$240,000
b.
Work IN Process (Direct materials used)
$130,700
Manufacturing Overhead (Indirect materials)
$20,500
Raw materials
$151,200
c.
Manufacturing Overhead
$15,500
Cash
$15,500
d.
Work in Process (direct labor costs)
$103,700
Manufacturing Overhead (Indirect labor costs)
$26,500
Cash
$130,200
e.
Work In Process (Refer Note 1)
$178,200
Manufacturing Overhead
$178,200
f.
Finished Goods Inventory
$357,300
Work in Process
$357,300
g.
Accounts Receivable
$540,000
Sales Revenue
$540,000
h.
Manufacturing Overhead
$152,500
Accumulated Depreciation - factory building
$68,000
Accumulated Depreciation - factory equipment
$38,000
Prepaid Insurance
$11,000
Property Taxes Payable
$35,500
i.
Work In Process (Refer Note 2) (21,200 + 8,000)
$29,200
Manufacturing Overhead
$29,200
Note 1 – Applied Overhead to Job 36,138 & 139
Job 136
Job 138
Job 139
Total
Direct Labor Costs
$12,200
$37,900
$39,000
$89,100
Predetermined Overhead Rate per direct labor cost
200%
200%
200%
Applied Manufacturing Overhead
$24,400
$75,800
$78,000
$178,200
Note 2 – Primary Working
Primary Working
Job 136
Job 137
Job 138
Job 139
Job 140
Total
Direct Materials
$48,000
$33,500
$19,200
$22,800
$7,200
$130,700
Direct Labor Costs
$12,200
$10,600
$37,900
$39,000
$4,000
$103,700
Applied Manufacturing Overhead (200% of Direct Labor Cost)
$24,400
$21,200
$75,800
$78,000
$8,000
$207,400
Total Manufacturing Cost
$84,600
$65,300
$132,900
$139,800
$19,200
$441,800
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Transaction
General Journal
Debit
Credit
a.
Raw materials
$240,000
Accounts Payable
$240,000
b.
Work IN Process (Direct materials used)
$130,700
Manufacturing Overhead (Indirect materials)
$20,500
Raw materials
$151,200
c.
Manufacturing Overhead
$15,500
Cash
$15,500
d.
Work in Process (direct labor costs)
$103,700
Manufacturing Overhead (Indirect labor costs)
$26,500
Cash
$130,200
e.
Work In Process (Refer Note 1)
$178,200
Manufacturing Overhead
$178,200
f.
Finished Goods Inventory
$357,300
Work in Process
$357,300
g.
Accounts Receivable
$540,000
Sales Revenue
$540,000
h.
Manufacturing Overhead
$152,500
Accumulated Depreciation - factory building
$68,000
Accumulated Depreciation - factory equipment
$38,000
Prepaid Insurance
$11,000
Property Taxes Payable
$35,500
i.
Work In Process (Refer Note 2) (21,200 + 8,000)
$29,200
Manufacturing Overhead
$29,200
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