Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022, Job

Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2022, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $21,200, direct labor $12,720, and manufacturing overhead $16,960. As of January 1, Job 49 had been completed at a cost of $95,400 and was part of finished goods inventory. There was a $15,900 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $129,320 and $167,480, respectively. The following additional events occurred during the month.

1. Purchased additional raw materials of $95,400 on account.
2. Incurred factory labor costs of $74,200.
3. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $12,720; and various other manufacturing overhead costs on account $16,960.
4. Assigned direct materials and direct labor to jobs as follows.

Job No.

Direct Materials

Direct Labor

50

$10,600 $5,300

51

41,340 26,500

52

31,800 21,200
5. Assigned indirect materials of $18,020 and indirect labor of $21,200.

(a)

Calculate the predetermined overhead rate for 2022, assuming Cullumber Company estimates total manufacturing overhead costs of $890,400, direct labor costs of $742,000, and direct labor hours of 21,200 for the year.

Predetermined overhead rate enter the predetermined overhead rate in percentages

%

Prepare the journal entries to record (1) the purchase of raw materials, (2) the factory labor costs incurred, and (3) the manufacturing overhead costs incurred during the month of January. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

(1)

enter an account title to record the purchase of raw materials

enter a debit amount

enter a credit amount

enter an account title to record the purchase of raw materials

enter a debit amount

enter a credit amount

(2)

enter an account title to record the factory labor costs incurred

enter a debit amount

enter a credit amount

enter an account title to record the factory labor costs incurred

enter a debit amount

enter a credit amount

(3)

enter an account title to record the manufacturing overhead costs incurred

enter a debit amount

enter a credit amount

enter an account title to record the manufacturing overhead costs incurred

enter a debit amount

enter a credit amount

enter an account title to record the manufacturing overhead costs incurred

enter a debit amount

enter a credit amount

Prepare the journal entries to record the assignment of (1) raw materials, (2) factory labor, and (3) manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

(1)

enter an account title to record the assignment of raw materials

enter a debit amount

enter a credit amount

enter an account title to record the assignment of raw materials

enter a debit amount

enter a credit amount

enter an account title to record the assignment of raw materials

enter a debit amount

enter a credit amount

(2)

enter an account title to record the assignment of factory labor

enter a debit amount

enter a credit amount

enter an account title to record the assignment of factory labor

enter a debit amount

enter a credit amount

enter an account title to record the assignment of factory labor

enter a debit amount

enter a credit amount

(3)

enter an account title to record the assignment of manufacturing overhead costs to production

enter a debit amount

enter a credit amount

enter an account title to record the assignment of manufacturing overhead costs to production

enter a debit amount

enter a credit amount

Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50. Post all costs to the job cost sheets as necessary.

Job No. 50

Date

Direct Materials

Direct Labor

Manufacturing Overhead

Beg.

$enter a dollar amount

$enter a dollar amount

$enter a dollar amount

Jan.

enter a dollar amount enter a dollar amount enter a dollar amount

$enter a total amount

$enter a total amount

$enter a total amount

Cost of completed job
Direct materials

$enter a dollar amount

Direct labor

enter a dollar amount

Manufacturing overhead

enter a dollar amount

Total cost

$enter a total amount

Job No. 51

Date

Direct Materials

Direct Labor

Manufacturing Overhead

Jan.

$enter a dollar amount

$enter a dollar amount

$enter a dollar amount

$enter a total amount

$enter a total amount

$enter a total amount

Cost of completed job
Direct materials

$enter a dollar amount

Direct labor

enter a dollar amount

Manufacturing overhead enter a dollar amount

Total cost

$enter a total amount

Job No. 52

Date

Direct Materials

Direct Labor

Manufacturing Overhead

Jan.

$enter a dollar amount $enter a dollar amount $enter a dollar amount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Treasury Financial Manual Volume 1 Book 2

Authors: US Treasury

1st Edition

1790318432, 978-1790318438

More Books

Students also viewed these Accounting questions

Question

quarterly demand for smartphones at a retailer is as shown

Answered: 1 week ago