Alain Company is a manufacturing firm that uses job-order costing. At the beginn

Question

Alain Company is a manufacturing firm that uses job-order costing. At the beginning of the year., the company's inventory balances were as follows: The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 45,000 machine-hours and incur $180,000 in manufacturing overhead cost. The following transactions were recorded for the year: Raw materials were purchased, S416,000. Raw materials were requisitioned for use in production, $420,000 ($380,000 direct and 540.000 indirect). The following employee costs were incurred: direct labor, $414,000; indirect labor, $60,000; and administrative salaries, $212,000. Selling costs, $141,000. Factory utility costs, $20,000. Depreciation for the year was $81,000 of which $73,000 is related to factory operations and $8,000 is related to selling, general, and administrative activities. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 48.000 machine-hours. The cost of goods manufactured for the year was SI,004,000. Sales for the year totaled $1,416,000 and the costs on the job cost sheets of the goods that were sold totaled $989,000. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold. Required: Prepare the appropriate journal entry for each of the items above (a. through j.). You can assume that all transactions with employees, customers, and suppliers were conducted in cash.

Explanation / Answer

Journal Entries:

Date Accounts Titles and explanation Debit $ Credit $ a Raw materials 416000 Cash 416000 b Work in process Inventory 380000 Manufacturing Overhead 40000 Raw materials 420000 c Work in process Inventory 414000 Manufacturing Overhead 60000 Selling and Administrative expenses 212000 Cash 686000 d Selling and Administrative expenses 141000 Cash 141000 e Manufacturing Overhead 20000 Cash 20000 f Manufacturing Overhead 73000 Selling and Administrative expenses 8000 Depreciation Expenses 81000 g Work in process Inventory 192000 Manufacturing Overhead 192000 (predeternined overhead applied rate =180000/45000=4) h Finished Goods Inventory 1004000 Work in process Inventory 1004000 i Cash 1416000 Sales 1416000 Cost of goods sold 989000 Finished Goods Inventory 989000 j Cost of goods sold 1000 Manufacturing Overhead 1000 (Manufacturing Overhead Dr. 193000 - Cr.192000 = Dr. 1000)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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