1 Docksider Boats uses a job order cost accounting system During one month Docksider purchased $153,000 of raw materials on credit issued materials to production of $164,000 of which $24,000 were indirect Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor Docksider uses a predetermined overhead application rate of 170 of direct labor cost The journal entry to record the issuance of materials to production is Answer Debit Raw Materials Inventory $153,000 credit Accounts Payable $153,000 Debit Goods in Process Inventory $140,000 debit Factory Overhead $24,000 credit Raw Materials Inventory $164,000 Debit Raw Materials Inventory $195,000 credit Goods in Process Inventory $195,000 Debit Goods in Process Inventory $140,000 debit Raw Materials Inventory $24,000 credit Materials Inventory $164,000 Debit Finished Goods Inventory $140,000 credit Raw Materials Inventory $140,000 2 Hancock Manufacturing allocates overhead to production on the basis of direct labor costs At the beginning of the year, Hancock estimated total overhead of $396,000 materials of $410,000 and direct labor of $220,000 During the year Hancock incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs Compute the overhead application rate Answer 180 55 6 186 184 96 6

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1.Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of

1.Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect. Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor. Docksider uses a predetermined overhead application rate of 170% of direct labor cost. The journal entry to record the issuance of materials to production is:

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		Debit Raw Materials Inventory $153,000; credit Accounts Payable $153,000.
		Debit Goods in Process Inventory $140,000; debit Factory Overhead $24,000; credit Raw Materials Inventory $164,000.
		Debit Raw Materials Inventory $195,000; credit Goods in Process Inventory $195,000.
		Debit Goods in Process Inventory $140,000; debit Raw Materials Inventory $24,000; credit Materials Inventory $164,000.
		Debit Finished Goods Inventory $140,000; credit Raw Materials Inventory $140,000.

2. Hancock Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Hancock estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Hancock incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs. Compute the overhead application rate.

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