Job costing, journal entries. Donnell Transport assembles prestige mobile homes. Its job¬

costing system has two direct-cost categories (direct materials and direct manufacturing labour)

and one indirect-cost pool (manufacturing overhead allocated at a budgeted $36 per machinehour in 2007). The following data (in millions) pertain to operations for the year 2007:

Materials control (beginning balance), December 31, 2006 $14.40 Work-in-process control (beginning balance), December 31, 2006 2.40 Finished goods control (beginning balance), December 31, 2006 7.20 Materials and supplies purchased on account 180 Direct materials used 174 Indirect materials (supplies) issued to various production departments 12 Direct manufacturing labour 108 Indirect manufacturing labour incurred by various departments 36 Amortization on plant and manufacturing equipment 23 Miscellaneous manufacturing overhead incurred (credit Various Liabilities;

ordinarily would be detailed as repairs, utilities, etc.) 11 Manufacturing overhead allocated, 2,520,000 actual machine-hours ?

Cost of goods manufactured 353 Revenues 480 Cost of goods sold 350 Required 1. Present an overview diagram ofDonnell Transport’s job-costing system.

2. Prepare general journal entries. Number your entries. Post to T-accounts. What is the ending balance ofWork-in-Process Control?

3. $how the journal entry for disposing of over- or underallocated manufacturing overhead 142 CHAPTER 4 directly as a year-end write-off to Cost of Goods $old. Post the entry to T-accounts.