Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 22,400, direct labor $13.440, and manufacturing overhead $ 17.920. As of January 1, Job 49 had been completed at a cost of $ 100,800 and was part of finished goods inventory. There was a $ 16,800 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $ 136,640 and $ 176,960, respectively. The following additional events occurred during the month 1. 2. 3. Purchased additional raw materials of $ 100,800 on account incurred factory labor costs of $ 78,400. Of this amount $ 17.920 related to employer payroll taxes. Incurred manufacturing overhead costs as followsindirect materials $ 19,040; indirect labor $ 22.400, depreciation expense on equipment $ 13,440, and various other manufacturing overhead costs on account $17.920. Assigned direct materials and direct labor to jobs as follows 4. Job No. Direct Labor Direct Materials $11.200 50 $5,600 51 43,680 28.000 52 33,600 22.400 Your answer is correct Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of 940,800, direct labor costs of $ 784,000, and direct labor hours of 22,400 for the year. Predetermined overhead rate 120 % Prepare the journal entries to record (1) the purchase of raw materials. (2) the factory labor costs incurred, and (3) the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) Raw Materials inventory 100000 Accounts Payable 10000 (2) Factory Labor 78400 Factory Wages Payable 60480 Employer Payroll Taxes Payable 17020 67600 (3) Manufacturing Overhead 19040 Raw Materials Inventory Prepare the journal entries to record the assignment of (1) direct materials. (2) direct labor, and (3) manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) Work in Process Inventory 88480 Raw Materials Inventory 88480 (2) Work in Process Inventory 56000 Factory Labor 56000 (3) Work in Process Inventory 67200 67200 Manufacturing Overhead = Openjob cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50. Postal costs to the job cost sheets as necessary Job No. 50 Date Direct Materials Direct Labor Manufacturing Overhead Beg $ 22400 S 13440 $ 17930 Jan. 11200 5600 $ 33600 $ 19000 $ Cost of completed job Direct materials HO Direct labor Cost of completed job Direct materials $ Direct labor JOTE Manufacturing overhead Total cost Job No. 51 0.47 Date Direct Materials Direct Labor Manufacturing Overhead Jan $ 43680 $ 28000 $ $ Cost of completed job Direct materials Direct labor Manufacturing overhead Total cost JUL 13
