Entries for Direct Labor and Factory Overhead Moura Industries Inc. manufactures

Question

Entries for Direct Labor and Factory Overhead

Moura Industries Inc. manufactures recreational vehicles. Moura uses a job order cost system. The time tickets from July jobs are summarized below.

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $24 per direct labor hour. The direct labor rate is $16 per hour.

If required, round final answers to the nearest dollar.

a. Journalize the entry to record the factory labor costs. If an amount box does not require an entry, leave it blank.

b. Journalize the entry to apply factory overhead to production for July.

Check My Work (2 remaining)

Explanation / Answer

Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Work-in-Progres                                      Dr.          15,040 Factory Overhead                                    Dr.            1,960    To Wages Payable          17,000 (Record the Factory Labor cost) b. Work-in-Progres                                      Dr.          22,560 To Factory Overhead          22,560 (Record the Factory overhead applied) Direct Labor Hours = $15,040 / $16 Direct Labor Hours = 940 hrs Factory Overhead Applied = 940 hrs X $24 = $22,560

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