Question
Fairfield Company applies manufacturing overhead to products at a predetermined rate of $64 per direct labor hour. Its actual manufacturing costs for the most recent
Fairfield Company applies manufacturing overhead to products at a predetermined rate of $64 per direct labor hour. Its actual manufacturing costs for the most recent period are summarized here:
Item | Description | Total Cost | |||
Direct materials | Used on Jobs 101 and 102 | 80,000 | |||
Indirect materials | Used on multiple jobs | 13,400 | |||
Hourly labor wages | 860 hours @ $32 per hour | ||||
190 hours for Job 101 = | $ | 6,080 | |||
270 hours for Job 102 = | 8,640 | ||||
400 hours for Job 103 = | 12,800 | 27,520 | |||
Factory supervision | 3,750 | ||||
Production engineer | 5,600 | ||||
Factory janitorial work | 1,500 | ||||
Selling, general, and administrative salaries | 8,200 | ||||
Other manufacturing overhead costs (factory rent, insurance, depreciation, etc.) | 6,400 | ||||
Other selling, general, and administrative costs (office rent, insurance, depreciation, etc.) | 4,100 | ||||
|
1. Prepare the journal entry to close the Manufacturing Overhead account balance to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
General Journal
1) Record the transfer of manufacturing overhead account balance to cost of goods sold.
2)
Indicate whether the entry in requirement 1 will increase or decrease Cost of Goods Sold.
Increase | |
Decrease |
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