The following information was taken fom the iob cost sheet for Job 101 for McDon
ID: 2544572 • Letter: T
Question
The following information was taken fom the iob cost sheet for Job 101 for McDonald Manufact Date started: Date completed: uring Company: December 5, 2018 January 21, 2019 Applied Facto Tob Direct Materials $3,000 Direct Total Date 12-05-18 12-15-18 12-17-18 12-22-18 1-01-19 1-21-19 Labor $900 1,350 600 Overhead $450 675 300 1,500 1.500 Job 101 was sold on account on January 25, 2019, for 160 percent of its cost. Factory overhead is applied on the basis of direct labor costs Required a. Prepare the journal entries to record the costs incurred for Job 101 in 2018-2019 for direct materials, direct labor, and factory overhead. b. Prepare the journal entry to record the completion of Job 101 c. What is the predetermined factory overhead rate for McDonald Manufacturing? d. Prepare the journal entries to record the sale of Job 101Explanation / Answer
McDonald Manufacturing Company
Journal Entries
Job101
Date
Particulars
Debit
Credit
1
05-12-18
Raw Material
$ 3,000
Bank
$ 3,000
15-12-18
Labour Wages
$ 900
Factory Overheads
$ 450
Bank
$ 1,350
17-12-18
Raw Material
$ 1,500
Bank
$ 1,500
22-12-18
Labour Wages
$ 1,350
Factory Overheads
$ 675
Bank
$ 2,025
01-01-19
Raw Material
$ 1,500
Bank
$ 1,500
21-01-19
Labour Wages
$ 600
Factory Overheads
$ 300
Bank
$ 900
2
21-01-19
Work-in-progress
$ 10,275
Raw Material
$ 6,000
Labour Wages
$ 2,850
Factory Overheads
$ 1,425
21-01-19
Finished Goods
$ 10,275
Work-in-progress
$ 10,275
3
The predetermined factory overhead rate for McDonald Manufacturing is based on the direct labour costs.
As per the data given it can be said that the rate is $ 0.5 for every $ 1 of Direct Labour cost
4
The finished goods of Job101 are sold for 160% of its cost
Cost
$ 10,275
Sale Value
160% of 10275
Sale Value
$ 16,440
Journal Entry
Date
Particulars
Debit
Credit
21-01-19
Bank
$ 16,440
Sales
$ 16,440
McDonald Manufacturing Company
Journal Entries
Job101
Date
Particulars
Debit
Credit
1
05-12-18
Raw Material
$ 3,000
Bank
$ 3,000
15-12-18
Labour Wages
$ 900
Factory Overheads
$ 450
Bank
$ 1,350
17-12-18
Raw Material
$ 1,500
Bank
$ 1,500
22-12-18
Labour Wages
$ 1,350
Factory Overheads
$ 675
Bank
$ 2,025
01-01-19
Raw Material
$ 1,500
Bank
$ 1,500
21-01-19
Labour Wages
$ 600
Factory Overheads
$ 300
Bank
$ 900
2
21-01-19
Work-in-progress
$ 10,275
Raw Material
$ 6,000
Labour Wages
$ 2,850
Factory Overheads
$ 1,425
21-01-19
Finished Goods
$ 10,275
Work-in-progress
$ 10,275
3
The predetermined factory overhead rate for McDonald Manufacturing is based on the direct labour costs.
As per the data given it can be said that the rate is $ 0.5 for every $ 1 of Direct Labour cost
4
The finished goods of Job101 are sold for 160% of its cost
Cost
$ 10,275
Sale Value
160% of 10275
Sale Value
$ 16,440
Journal Entry
Date
Particulars
Debit
Credit
21-01-19
Bank
$ 16,440
Sales
$ 16,440
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