the company uses job order costing system in which overhead is applied to jobs o
ID: 2386742 • Letter: T
Question
the company uses job order costing system in which overhead is applied to jobs on yhe basis of direct labor cost. at the beginning of the year it was estimated that the total direct labor cost for the year would be Rmb200,000 and the total manufacturing overhead cost would be Rmb330,000. at the beginning of the year the inventory balances were as follows:
raw materials................Rmb25,000
WIP...........................Rmb10,000
FG............................Rmb40,000
during the year the following transactions were completed:
a.raw material purchased for cash Rmb275,000
b.raw materials requesitioned for use in productions, Rmb280,000(materials costing Rmb220,000 were charged directly to job;the remaining materials were indirect)
c.cost for employee services were incurred as follows:
direct labor....................Rmb180,000
indirect labor.................Rmb72,000
sales commisions............Rmb63,000
administrative salaries.....Rmb90,000
d.rent for the year was Rmb18,000
e.utility cost incurred in the factory Rmb57,000
f.manufacturing overhead cost was applied to jobs,Rmb_____________?
g.goods that had cost Rmb675,000 to manufacture according to their job cost sheet were completed
h.sales for the year totaled Rmb250,000.the total cost to manufacture these goods according to the job cost sheets was Rmb700,000
prepare jounal entries to record the transactions for the year!
Explanation / Answer
a) Raw materials A/c…………….Dr 275,000 To Cash A/c 275,000 b) Work -in-process A/c………..Dr. 280,000 To Direct Raw materials A/c 220,000 To Indirect Raw materials A/c 60,000 c) Direct labor A/c…………….Dr 180,000 Indirect labor A/c……………Debit 72,000 Sales Commission A/c……..Dr 63,000 Administrative Salaries A/c…….Dr. 90,000 Utility expenses A/c………..Dr 57,000 Rent A/c………………..Dr 18,000 To Cash A/c 480,000 d) WIP A/c…………….Dr. 252,000 To Direct labor A/c 180,000 To Indirect labor A/c 72,000 e) WIP A/c…………..Dr 297,000 To manufacturing overhead A/c 297,000 (330,000/200,000*180,000) f) Cost of Goods sold A/c…….Dr 549,000 To WIP A/c 549,000 g) Cost of Goods Sold A/c…… Debit 228,000 To Selling and distribution overhead (63,000+90,000+57,000+18,000) 228,000 h) Finished goods A/c………..Dr 675,000 To Cost of goods sold A/c 675,000 i) Sales A/c……….Dr 700,000 To finished goods A/c 700,000 j) Cash A/c…………………… Debit 250,000 To Sales A/c 250,000
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