Question
Ashville Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis
Ashville Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, it was estimated that the company would work 230,000 machine-hours and incur $5,750,000 in manufacturing overhead costs.
The company spent the entire month of January working on a large order for 10,300 units of custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow:
- Raw materials purchased on account, $464,000.
- Raw materials requisitioned for production, $400,000 (80% direct materials and the rest indirect materials).
- Labour cost incurred in the factory, $120,000 (50% indirect labour and the remaining direct labour).
- Depreciation recorded on factory equipment, $175,000.
- Other manufacturing overhead costs incurred, $95,000 (credit accounts payable).
- Manufacturing overhead cost applied to production on the basis of 16,500 machine-hours actually worked during the month.
- Completed job moved into finished goods warehouse on January 31 to await delivery to customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labour, andappliedoverhead.)
Required:
1.Prepare journal entries to record items (a) through (f) above (ignore item (g) for the moment).(If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)
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