EXERCISE 17.10

Journal Entries, Cost Flows, and Financial Reporting

Marshall uses a job order costing system to account for projects. It applies manufacturing overhead to jobs on the basis of direct labor hours and pays its direct labor workers $30 per hour. The following information relates to the month of December (some of it may not be used to complete this exercise).

Manufacturing overhead budgeted (estimated on December 1) $160,000 Budgeted driver activity (DLH) (estimated on December 1) 2,000 DLH Direct materials purchased in December $130,000 Direct materials used in December 140,000 Actual direct labor costs in December 72,000 Actual manufacturing overhead in December 198,000 Cost of jobs completed in December 390,000 Sales generated in December 750,000 Cost of goods sold in December (prior to adjusting for overhead) 422,000 Selling and administrative costs in December 270,000 Materials Inventory, December 1 30,000 Work in Process Inventory, December 1 60,000 Finished Goods Inventory, December 1 180,000

Instructions

Record the cost of direct materials applied to jobs in December.