Problem 20-1A (Part Level Submission) Lott Company uses a job order cost system

Question

Problem 20-1A (Part Level Submission) Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $90,000 on account. 2. Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $12,000; and various other manufacturing overhead costs on account $16,000. 4. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,000 $5,000 51 39,000 25,000 52 30,000 20,000 Collapse question part (a) Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. (Round answer to the nearest whole percent, e.g. 25%.) Predetermined overhead rate % SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 0 of 3 used SAVE FOR LATER SUBMIT ANSWER Expand question part (b) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (c) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (d) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (e) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (f) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (g) The parts of this question must be completed in order. This part will be available when you complete the part above. Expand question part (h) The parts of this question must be completed in order. This part will be available when you complete the part above.

Explanation / Answer

predetermined overhead rate Estimated manufacturing overhead/total estimated direct labor costs 840,000/700000 120.00% job no 50 Date Direct direct MOH materials labor beg. 20,000 12,000 16,000 Jan 10,000 5,000 6,000 30,000 17,000 22,000 cost of completed job Direct materials 30,000 direct labor 17,000 MOH 22,000 total cost 69,000 job no 51 Date Direct direct MOH materials labor Jan 39,000 25,000 30,000 39,000 25,000 30,000 cost of completed job Direct materials 39,000 direct labor 25,000 MOH 30000 total cost 94,000 Job 52 Date Direct direct MOH materials labor Jan 30,000 20,000 24,000 No Account titles & Explanations Debit Credit 1) Raw materials inventory 90,000 Accounts payable 90,000 2) Factory labor 70,000 Factory wages payable 54,000 employer payroll taxes payable 16,000 3) manufacturing overhead 65,000 raw materials inventory 17,000 Factory labor 20,000 Accumulated depreciation 12,000 Accounts payable 16,000 No Account titles & Explanations Debit Credit 1) Work in process inventory 79,000 Raw materials inventory 79,000 2) work in process inventory 50,000 Factory labor 53,000 3) Work in process inventory 60000 manufacturing overhead 60,000 Account titles & Explanations Debit Credit finished goods inventory 163,000 work in process inventory 163,000 (job 50 +job 51 = No Account titles & Explanations Debit Credit Accounts receivable 280000 sales 280,000 cost of goods sold finished goods inventory 159,000 (job 49+job 50) 159,000 finished goods inventory 94,000 Job No 51 finished goods inventory opening 90,000 COGS 159,000 WIP 163,000 end bal 94,000 manufacturing overhead 5,000 under applied manufacturing overhead Actual 65,000 Applied 60,000 bal 5,000

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.