Exercise 3-10 (Static) Applying Overhead; Journal Entries; T-accounts [LO3-1, LO3-2]
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Return to question LO Exercise 3-10 (Static) Applying Overhead; Journal Entries; T-accounts [LO3-1, LO3-2] 3 points Dillon 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, the company used a cost formula to estimate that it would incur $4,800,000 in manufacturing overhead cost at an activity level of 240,000 machine-hours. The company spent the entire month of January working on a large order for 16,000 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, $325,000. b. Raw materials used in production, $290,000 (80% direct materials and 20% indirect materials). c. Labor cost accrued in the factory, $180,000 (one-third direct labor and two-thirds indirect labor). d. Depreciation recorded on factory equipment, $75,000. e. Other manufacturing overhead costs incurred on account, $62,000. f. Manufacturing overhead cost was applied to production on the basis of 15,000 machine-hours actually worked during the month. g. The completed job for 16,000 custom-made machined parts was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, and applied overhead.) Return to question 5 g. The completed job for 16,000 custom-made machined parts was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, and applied overhead.) 3 points Required: 1. Prepare journal entries to record items (a) through (f) above [ignore item (g) for the moment). 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant items from your journal entries to these T- accounts. 3. Prepare a journal entry for item (g) above. 4. If 10,000 of the custom-made machined parts are shipped to the customer in February, how much of this job's cost will be included in cost of goods sold for February? X Answer is not complete. Complete the question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 No Transaction General Journal Debit Credit 1 a. 325,000 Raw materials Accounts payable 325,000 2 b. Work in process 232,000 Manufacturing overhead 58,000 290,000 3 C. Manufacturing overhead 120,000 60,000 Work in process 180,000 4 d. 75,000 Manufacturing overhead Accumulated depreciation 75,000 5 e. 62,000 Manufacturing overhead Accounts payable 62,000 6 f. Work in process 300,000 Manufacturing overhead 300,000 Required 1 Required 2 Required 3 Required 4 Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant items from your journal entries to these T- accounts. Work in Process b. f. b. 232,000 Manufacturing Overhead 58,000 300,000 120,000 75,000 C. C. 60,000 300,000 d. f. e. 62,000 0 End. Bal. 15,000 End. Bal. 592,000 X Answer is not complete. Complete the question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare a journal entry for item (g) above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit g. Finished goods 592,000 Work in process 592,000 Answer is not complete. Complete the question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 If 10,000 of the custom-made machined parts are shipped to the customer in February, how much of this job's cost will be included in cost of goods sold for February? Portion of job cost included in cost of goods sold $ 370,000
