Problem

You are asked to bring the following incomplete accounts of Endeavour Printing, Inc., up to date through January 31, 2018. Consider the data that appear in the T-accounts as well as the following information in items (a) through (j).

Endeavour's normal costing system has two direct cost categories (direct material costs and direct manufacturing labour costs) and one indirect cost pool (manufacturing overhead costs, which are allocated using direct manufacturing labour costs).

Additional Information

Manufacturing overhead is allocated using a budgeted rate that is set every December. Management forecasts next year's manufacturing overhead costs and next year's direct manufacturing labour costs. The budget for 2018 is $600,000 for manufacturing overhead costs and $400,000 for direct manufacturing labour costs.

The only job unfinished on January 31, 2018, is No. 419, on which direct manufacturing labour costs are $2,000 (125 direct manufacturing labour-hours) and direct material costs are $8,000.

Total direct materials issued to production during January 2018 are $90,000.

Cost of goods completed during January is $180,000.

Materials inventory as of January 31, 2018, is $20,000.

Finished goods inventory as of January 31, 2018, is $15,000.

All plant workers earn the same wage rate. Direct manufacturing labour-hours used for January total 2,500 hours. Other labour costs total $10,000.

The gross plant payroll paid in January equals $52,000. Ignore withholdings.

All "actual" manufacturing overhead incurred during January has already been posted.

All materials are direct materials.

Required

Calculate the following:

Materials purchased during January.

Cost of Goods Sold during January.

Direct manufacturing labour costs incurred during January.

Manufacturing Overhead Allocated during January.

Balance, Wages Payable Control, December 31, 2017.

Balance, Work-in-Process Control, January 31, 2018.

Balance, Work-in-Process Control, December 31, 2017.

Manufacturing Overhead Underallocated or Overallocated for January 2018.

i DON'T UNDERSTAND THE JOURNAL ENTRIES

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