PROBLEM 2 BUILDING BLOCKS + JOB COSTING Seaway, Inc. manufactures outboard motors and other marine equipment. The company uses a job-order costing system. Manufacturing overhead is applied on the basis of machine hours. Estimated manufacturing overhead for the year is $1,520,200, and management expects that 69,100 machine hours will be used.

REQUIRED: Prepare journal entries to record the following events, which occurred during May:

e) Labor costs incurred during May totaled $92,500. This amount includes $19,000 of indirect labor costs. Of the total labor costs, $75,000 were paid in cash and the remainder remained unpaid at the end of the month. f) Depreciation on equipment for May totaled $8,500. g) Job number G22, consisting of 60 tachometers, was finished during May. The total cost of the job was $1,200. h) During May, 6,500 machine hours were used. i) Assume actual manufacturing overhead costs totaled $141,000, including amounts recorded in items (a) (h). The company closed underallocated or overallocated manufacturing overhead. j) Sales in May amounted to $181,000, all of which was on account. Cost of goods sold in May totaled $142,500.