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 | $ | 17,200 | |
Work in process | $ | 11,200 | |
Finished goods | $ | 32,400 | |
The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 36,000 machine-hours and incur $157,320 in manufacturing overhead cost. The following transactions were recorded for the year:
Raw materials were purchased on account: $206,000.
Raw materials were requisitioned for use in production: $196,000 (80% direct and 20% indirect).
The following costs were incurred for employee services:
Direct labour | $ | 166,000 | |
Indirect labour | $ | 28,200 | |
Sales commissions | $ | 37,200 | |
Administrative salaries | $ | 82,400 | |
Heat, power, and water costs were incurred in the factory: $43,200.
Prepaid insurance expired during the year: $11,200 (90% relates to factory operations, and 10% relates to selling and administrative activities).
Advertising costs were incurred, $51,200.
Depreciation was recorded for the year: $61,200 (85% relates to factory operations, and 15% relates to selling and administrative activities).
Manufacturing overhead cost was applied to production. The company recorded 40,000 machine-hours for the year.
Goods that cost $494,400 to manufacture according to their job cost sheets were transferred to the finished goods warehouse.
Sales for the year totalled $742,000 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $487,000.
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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