Chesapeake Sailmakers uses job order costing. Manufacturing overhead is charged

Question

Chesapeake  Sailmakers uses job order costing. Manufacturing overhead is charged to  individual jobs through the use of a predetermined overhead rate based  on direct labor costs. The following information appears in the  company's Work in Process Inventory account for the month of June:

       
   

    
   

Assuming  that the direct labor charged to the jobs still in process at June 30  amounts to $2,100, compute the amount of manufacturing overhead and the  amount of direct materials that have been charged to these jobs as of  June 30. (Omit the "$" sign in your response.)

      

      

The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June.

The transfer of production completed during June to the Finished Goods Inventory account.

The  cash sale of 90 percent of the merchandise completed during June at a  total sales price of $46,000. Show the related cost of goods sold in a  separate journal entry.

    
    

   Debits to account:          Balance, June 1 $ 7,200            Direct materials 13,000            Direct labor 9,200            Manufacturing overhead (applied to jobs as 150% of direct labor cost) 14,000               Total debits to account $ 43,400      Credits to account:          Transferred to Finished Goods Inventory account 33,200      Balance, June 30 $ 10,200  

Explanation / Answer

a. Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $2,100, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30. (Omit the "$" sign in your response.)

Manufacturing overhead charged to jobs in process,

June 30:

Direct labor charged to jobs in process, June 30 $2,100

Overhead application rate 150%*2100 = 3150

Manufacturing overhead applied to jobs

in process, June 30 $3,150

Direct materials charged to jobs in process, June 30:

Total cost of jobs in process $8,500

Less: Direct labor included $2,100

Manufacturing overhead included 3,150 5,250

Direct materials charged to jobs in process, June 30 $3,250

So Ans is :

Manufacturing overhead applied to jobs $ 3,150

Direct materials charged to jobs $ 3,250

b. Prepare general journal entries to summarize: (Omit the "$" sign in your response.)

1.The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June.

Work in Process Inventory Dr36,200

Materials Inventory Cr 13,000

Direct Labor Cr 9,200

Manufacturing Overhead Cr 14,000

2.The transfer of production completed during June to the Finished Goods Inventory account.

Finished Goods Inventory 33,200

Work in Process Inventory 33,200

3.The cash sale of 90 percent of the merchandise completed during June at a total sales price of $46,000. Show the related cost of goods sold in a separate journal entry.

Cash 46,500

Sales 46,500

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