Widmer Watercraft’s predetermined overhead rate for year 2015 is 200% of direct

Question

Widmer Watercraft’s predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company’s production activities during May 2015 follows.

The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost

1.

Prepare a job cost sheet for each job worked on during the month.

2.

Prepare journal entries to record the events and transactions a through i.

3.

Prepare T-accounts for each of the following general ledger accounts, each of which started the month with a zero balance: Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Factory Payroll, Factory Overhead, Cost of Goods Sold. Post the journal entries from Part 2 to the following T-accounts.

4. Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold.

Widmer Watercraft’s predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company’s production activities during May 2015 follows.

Explanation / Answer

1 We summarise cost sheets as follows

Job 136 137 138 139 140 Direct Material Given 48000 32000 19200 22400 6400 Direct Labor Given 12000 10500 37500 39000 3000 Prime Cost D.Material + D.Labor 60000 42500 56700 61400 9400 Factory Overheads 200 % D. Labor 24000 21000 75000 78000 6000 Factory Cost Prime cost + Overheads 84000 63500 131700 139400 15400 Transferred to F. G. 84000 131700 139400 Transferred to W.I.P. 63500 15400

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

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