Refer to M2-9.

1. Prepare the journal entry to record Kelly Company’s payroll costs.

2. The company applies manufacturing overhead to products at a predetermined rate of \($50\) per direct labor hour. Prepare the journal entry to apply manufacturing overhead to production.

Data from M2-9.

Kelly Company’s payroll costs for the most recent month are summarized here:

1. Calculate how much of the labor costs would be added to the following accounts: Work in Process Inventory Manufacturing Overhead Selling and Administrative Expenses 

2. Explain why some labor costs are recorded as work in process, some as manufacturing overhead, and some as period costs.

Transcribed Image Text:

Item Hourly labor wages Description 750 hours $25 per hour 200 hours for Job 101 = 300 hours for Job 102 = 250 hours for Job 103= Factory supervision Production engineer Factory janitorial work General and administrative salaries Total payroll costs Total Cost $5,000 7,500 6,250 $18,750 4,250 6,000 2,000 8,000 $39,000