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Job Cost Journal Entries and T Accounts Following are certain operating data for Durango Manufacturing Company for January 2016 Materials Inventory Work in Process Inventory

Job Cost Journal Entries and T Accounts

Following are certain operating data for Durango Manufacturing Company for January 2016

Materials Inventory Work in Process Inventory Finished Goods Inventory
Beginning inventory $171,000 $72,000 $225,000
Ending inventory 99,000 121,500 144,000

Total sales were $5,400,000, on which the company earned a 40% gross profit. Durango uses a predetermined manufacturing overhead rate of 120% of direct labor costs. Manufacturing overhead applied was $1,080,000. Exclusive of indirect material used, total manufacturing overhead incurred was $729,000 it was over-applied by $67,500.

Required

Compute the following items. (Set up T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, and Manufacturing Overhead; fill in the known amounts; and then use the normal relationships among the various accounts to compute the unknown amounts.)

  1. Cost of goods sold.

  2. Cost of goods manufactured.

  3. Direct labor incurred

  4. Direct material used.

  5. Indirect material used.

  6. Total materials purchased.

Materials Inventory
Beg. bal.

171,000

Answer (d)
(f) Answer Answer (e)
End. bal. Answer
Work in Process Inventory
Beg. bal.

72,000

Answer (b)
(c) Answer
(d) Answer
Answer
End. bal. Answer
Manufacturing Overhead
Beg. bal.

0

Answer
Answer
(e) Answer
Answer End. bal.
Finished Goods Inventory
Beg. bal.

225,000

Answer (a)
(b) Answer
End. bal. Answer

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