Vulcan Molding produces molded rubber components. At the start of the year, the

Question

Vulcan Molding produces molded rubber
components. At the start of the year, the company estimated that it would incur $3,400,000
of direct labor cost and $8,500,000 of manufacturing overhead.Overhead is allocated to production
on the basis of direct labor cost.Actual materials used during the year were $5,500,000,actual
direct labor cost was $3,500,000, and actual overhead was $9,000,000.
Required
a. Calculate the overhead rate for the current year.
b. Prepare the journal entry to record use of direct material.
c. Prepare the journal entry to record direct labor.
d. Prepare the journal entry to record manufacturing overhead applied to production.
e. Prepare the journal entry to close the balance in manufacturing overhead to cost of goods sold.

Explanation / Answer

1.Overhead rate for the current year Actual materials used $5,500,000 actual direct labor $3,500,000 Actual overhead $9,000,000 Total cost $18,000,000 b.work in process $5,500,000         Direct materials $5,500,000 c. Work in process $3,500,000         Direct lbor $3,500,000 d. work in process $8,500,000       Manufacturing overheads $8,500,000 e. cost of goods sold $500,000       Manufacturing oveheads $500,000 ($9000000-8500000)

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