Question
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the companys inventory balances were as follows: Raw materials
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the companys inventory balances were as follows:
Raw materials | $ | 19,500 | |
Work in process | $ | 11,400 | |
Finished goods | $ | 30,700 | |
The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 36,700 machine-hours and incur $168,820 in manufacturing overhead cost. The following transactions were recorded for the year:
- Raw materials were purchased on account: $214,000.
- Raw materials were requisitioned for use in production: $197,000 (80% direct and 20% indirect).
- The following costs were incurred for employee services:
Direct labour | $ | 165,600 | |
Indirect labour | $ | 28,400 | |
Sales commissions | $ | 38,100 | |
Administrative salaries | $ | 82,800 | |
- Heat, power, and water costs were incurred in the factory: $45,150.
- Prepaid insurance expired during the year: $13,500 (85% relates to factory operations, and 15% relates to selling and administrative activities).
- Advertising costs were incurred, $53,500.
- Depreciation was recorded for the year: $64,200 (90% relates to factory operations, and 10% relates to selling and administrative activities).
- Manufacturing overhead cost was applied to production. The company recorded 41,400 machine-hours for the year.
- Goods that cost $510,900 to manufacture according to their job cost sheets were transferred to the finished goods warehouse.
- Sales for the year totalled $732,500 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $504,500.
Required:
1. Prepare journal entries to record the transactions given above. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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