Elliott Manufacturing uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A, direct labor hours in Department B, and machine hours in Department C. In establishing the predetermined overhead rates for 2010 the following estimates were made for the year

Department

A B C

Manufacturing overhead $780,000 $640,000 $750,000

Direct labor cost $600,000 $100,000 $600,000

Direct labor hours 50,000 40,000 40,000

Machine hours 100,000 120,000 150,000

During January, the job cost sheets showed the following costs and production data

A B C

Direct materials used $92,000 $86,000 $64,000

Direct labor cost $48,000 $35,000 $50,400

Manufacturing overhead incurred $66,000 $60,000 $62,100

Direct labor hours 4,000 3,500 4,200

Machine hours 8,000 10,500 12,600

Instructions

1. Compute the predetermined overhead rate for each department.(b) Compute the total manufacturing costs assigned to jobs in January in each department.(c) Compute the under- or overapplied overhead for each department at January 31

Answer:

2. In the month of January following manufacturing costs: raw materials $4,000 on account, factory labour $5,000 of which $4,200 relates to factory wages payable and $800 relates to payroll taxes payable, and utilities payable $2,000. Prepare separate journal entries for each type of manufacturing cost.

Answer: