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Problem 2-4A (Algo) Preparing job cost sheets, recording costs, preparing inventory ledger accounts LO P1, P2, P3

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Watercrafts predetermined overhead rate is 200% of direct labor. Information on the companys production activities during May follows.

1. Purchased raw materials on credit, $260,000.

Materials requisitions record use of the following materials for the month.

Job 136	$ 48,000
Job 137	32,500
Job 138	19,400
Job 139	23,000
Job 140	7,000
Total direct materials	129,900
Indirect materials	21,500
Total materials requisitions	$ 151,400

Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$ 12,000
Job 137	10,700
Job 138	38,100
Job 139	39,000
Job 140	3,600
Total direct labor	103,400
Indirect labor	24,500
Total labor cost	$ 127,900

1. Applied overhead to Jobs 136, 138, and 139.
2. Transferred Jobs 136, 138, and 139 to Finished Goods Inventory.
3. Sold Jobs 136 and 138 on credit at a total price of $530,000.
4. Recorded the cost of goods sold for Jobs 136 and 138.

Incurred the following actual other overhead costs during the month.

Depreciation of factory building	$ 69,000
Depreciation of factory equipment	37,000
Expired factory insurance	12,000
Accrued property taxes payable	35,500

1. Applied overhead at month-end to the Work in Process Inventory account (for Job 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Problem 2-4A (Algo) Part 2

2. Prepare journal entries to record the events and transactions a through i.