ShawnXu Enterprises recorded the following transactions for the just completed J
ID: 2375217 • Letter: S
Question
ShawnXu Enterprises recorded the following transactions for the just completed January 2010:
a.
$89,000 in raw materials were requisitioned for use in production. Of this amount, $78,000 was for direct materials and the remainder was for indirect materials.
b.
Total labor wages of $132,000 were incurred and paid in cash. Of this amount, $112,000 was for direct labor and the remainder was for indirect labor.
c.
Additional manufacturing overhead costs of $143,000 were incurred and paid.
d.
Manufacturing overhead costs of $152,000 were applied to jobs using the company's predetermined overhead rate.
Required:
1. 1). Please record transaction %u201Ca%u201D in journal entries. show work
2. 2). Determine the total ACTUAL manufacturing overhead costs recorded for January?
3. 3). Determine the amount of underapplied or overapplied overhead for January. Please indicate under or over-applied. Show your work.
4. 4). Determine the total manufacturing costs that were added into Work In Process account for January? Show your work.
Production in units
Manufacturing Supplies
March
450,000
$ 723,060
April
540,000
853,560
May
480,000
766,560
D. $752,060
ShawnXu Enterprises recorded the following transactions for the just completed January 2010:
Explanation / Answer
(1)
(a)
Dr Work in progress $78,000
Dr Factory overhead $11,000
Cr Raw Material inventory $89,000
(b)
Dr Work In Progress $112,000
Dr Factory Overhead $20,000
Cr Cash $132,000
(c)
Dr Factory overhead $143,000
Cr Cash $143,000
(d)
Dr Work In Progress $152,000
Cr Factory Overhead $152,000
(2)
Total manufacturing overhead recorded = 11000 + 20000 + 143000 = $174,000
(3)
Total manufacturing overhead recorded = $174,000
Total Overhead applied = $152,000
Underapplied of overhead = 174000 - 152000 = $22,000
(4) This will be the overhead applied = $152,000
(5) A. can be either a variable cost or a fixed cost.
(6)
Variable cost = (853560 - 723060)/(540000 - 450000) = 130500/90000 =$1.45
Fixed cost = 853560 - 540000 x 1.45 = $70,560
Best estimate of the cost of manufacturing supplies that would be needed for July = 70560 + 470000*1.45 = $752,060
(D) is the answer.
Hope this helps!
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