Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P3-4A. Job Cost Journal Entries Prior to the beginning of 2019, Lowe Company estimated that it would incur $176, 000 of manufacturing overhead cost during
P3-4A. Job Cost Journal Entries Prior to the beginning of 2019, Lowe Company estimated that it would incur $176, 000 of manufacturing overhead cost during 2019, using 16,000 direct labor hours to produce the desired volume of goods. On January 1, 2019 beginning balances of Materials Inventory, Work-in-Process Inventory, and Finished Goods Inventory were $28,000, $-0-, and $43,000, respectively.
Required
Prepare general journal entries to record the following for 2019:
- Purchased materials on account, $39,000
- Of the total dollar value of materials used, $31,000 represented direct materials and $11,000 indirect materials.
- Determined total factory labor, $135,000 (15,000 hrs @ $9/hr).
- Of the factory labor, 80% was direct and 20% indirect.
- Applied manufacturing overhead based on direct labor hours to work-in-process.
- Determined actual manufacturing overhead other than those items already recorded, $92,000. (Credit Accounts Payable).
- Ending Inventories of work-in-process and finished goods were $32,000 and $57,000, respectively. Determine the cost of finished goods (credit WIP) and the cost of goods sold (credit FG inventory). Make separate entries.
- Transferred the balance in Manufacturing Overhead to Cost of Goods Sold.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started