Problem 7-51 Tracing Costs in a Job Company (LO 7-2, 3)

The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing:

Purchased $54,400 in materials on account.

Issued $2,200 in supplies from the materials inventory to the production department.

Paid for the materials purchased in transaction (1).

Issued $26,200 in direct materials to the production department.

Incurred wage costs of $49,000, which were debited to Payroll, a temporary account. Of this amount, $14,200 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $34,800 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll.

Recognized $28,000 in fringe benefit costs, incurred as a result of the wages paid in (5).

Analyzed the Payroll account and determined that 70 percent represented direct labor; 20 percent, indirect manufacturing labor; and 10 percent, administrative and marketing costs.

Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $33,100.

Applied overhead on the basis of 150 percent of direct labor costs.

Recognized depreciation of $17,950 on manufacturing property, plant, and equipment.

Required:

a. Prepare journal entries to record these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. The following balances appeared in the accounts of Apex Manufacturing:

	Beginning			Ending
Materials Inventory	$	56,625
Work-in-Process Inventory		13,425
Finished Goods Inventory		62,950		$	51,200
Cost of Goods Sold					102,275

Prepare T-accounts to show the flow of costs during the period:

1) Materials Inventory

2) Work in process Inventory

3) Manufacturing Overhead Control

4) Applied Manufacturing Overhead

5) Accounts Payable

6) Cash

7) Payroll

8) Payroll Taxes Payable

9) Fringe Benefits Payable

10) Administrative and Marketing Costs

11) Accumlulated Depreciation - Property, Plant, and Equipment

12) Finished Goods

13) Cost of Goods Sold