Question
Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in
Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $248,000 of manufacturing overhead for an estimated allocation base of $155,000 direct material dollars. |
The following transactions took place during the year (all purchases and services were acquired on account): |
a. | Raw materials purchased, $142,000. |
b. | Raw materials requisitioned for use in production (all direct materials), $150,000. |
c. | Utility bills incurred in the factory, $21,000. |
d. | Costs for salaries and wages were incurred as follows: |
Direct labor | $ | 216,000 |
Indirect labor | $ | 90,000 |
Selling and administrative salaries | $ | 145,000 |
e. | Maintenance costs incurred in the factory, $15,000. |
f. | Advertising costs incurred, $130,000. |
g. | Depreciation recorded for the year, $50,000 (90% relates to factory assets, and the remainder relates to selling and administrative assets). |
h. | Rental cost incurred on buildings, $90,000 (80% of the space is occupied by the factory, and 20% is occupied by sales and administration). |
i. | Miscellaneous selling and administrative costs incurred, $17,000. |
j. | Manufacturing overhead cost was applied to jobs, $ ? . |
k. | Cost of goods manufactured for the year, $590,000. |
l. | Sales for the year (all on account) totaled $1,000,000. These goods cost $600,000 according to their job cost sheets. |
The balances in the inventory accounts at the beginning of the year were as follows: |
Raw materials | $ | 18,000 |
Work in process | $ | 24,000 |
Finished Goods | $ | 35,000 |
Required: |
1. | Prepare journal entries to record the above data. |
General Journal | Debit | Credit | |
a. | (Click to select)Advertising expenseSalaries and wages payableManufacturing overheadRaw materialsAccounts payableWork in processSelling and administrative salariesMiscellaneous expense | ||
(Click to select)Miscellaneous expenseSalaries and wages payableSelling and administrative salariesAdvertising expenseManufacturing overheadRaw materialsWork in processAccounts payable | |||
b. | (Click to select)Salaries and wages payableAccounts payableAdvertising expenseSelling and administrative salariesManufacturing overheadWork in processRaw materialsMiscellaneous expense | ||
(Click to select)Work in processSelling and administrative salariesManufacturing overheadAdvertising expenseRaw materialsSalaries and wages payableMiscellaneous expenseAccounts payable | |||
c. | (Click to select)Accounts payableAdvertising expenseSelling and administrative salariesWork in processMiscellaneous expenseSalaries and wages payableManufacturing overheadRaw materials | ||
(Click to select)Accounts payableManufacturing overheadSalaries and wages payableAdvertising expenseRaw materialsService expensesMiscellaneous expenseWork in process | |||
d. | (Click to select)Salaries and wages payableManufacturing overheadWork in processAdvertising expenseSelling and administrative salariesMiscellaneous expenseRent expenseAccounts payable | ||
(Click to select)Work in processSelling and administrative salariesManufacturing overheadAdvertising expenseRent expenseMiscellaneous expenseSalaries and wages payableAccounts payable | |||
(Click to select)Advertising expenseWork in processManufacturing overheadAccounts payableSalaries and wages payableRent expenseSelling and administrative salariesMiscellaneous expense | |||
(Click to select)Salaries and wages payableSelling and administrative salariesAdvertising expenseMiscellaneous expenseWork in processAccounts payableManufacturing overheadRent expense | |||
e. | (Click to select)Manufacturing overheadSelling and administrative salariesAdvertising expenseAccounts payableDepreciation expenseMiscellaneous expenseSalaries and wages payableAccumulated depreciation | ||
(Click to select)Salaries and wages payableAccumulated depreciationAccounts payableDepreciation expenseSelling and administrative salariesAdvertising expenseMiscellaneous expenseManufacturing overhead | |||
f. | (Click to select)Manufacturing overheadAdvertising expenseAccumulated depreciationAccounts payableSalaries and wages payableDepreciation expenseSelling and administrative salariesMiscellaneous expense | ||
(Click to select)Selling and administrative salariesAccounts payableSalaries and wages payableAdvertising expenseDepreciation expenseAccumulated depreciationMiscellaneous expenseManufacturing overhead | |||
g. | (Click to select)Accumulated depreciationDepreciation expenseManufacturing overheadRent expenseMiscellaneous expenseAccounts payableSelling and administrative salariesAdvertising expense | ||
(Click to select)Depreciation expenseManufacturing overheadRent expenseAccumulated depreciationSelling and administrative salariesAccounts payableMiscellaneous expenseAdvertising expense | |||
(Click to select)Accumulated depreciationDepreciation expenseRent expenseAccounts payableAdvertising expenseMiscellaneous expenseSelling and administrative salariesManufacturing overhead | |||
h. | (Click to select)Advertising expenseManufacturing overheadSelling and administrative salariesRent expenseAccumulated depreciationMiscellaneous expenseAccounts payableDepreciation expense | ||
(Click to select)Selling and administrative salariesMiscellaneous expenseManufacturing overheadDepreciation expenseAccounts payableAccumulated depreciationAdvertising expenseRent expense | |||
(Click to select)Accounts payableAccumulated depreciationAdvertising expenseMiscellaneous expenseManufacturing overheadSelling and administrative salariesRent expenseDepreciation expense | |||
i. | (Click to select)Rent expenseSalaries and wages payableMiscellaneous expenseManufacturing overheadAccounts payableWork in processSelling and administrative salariesAdvertising expense | ||
(Click to select)Salaries and wages payableAdvertising expenseRent expenseSelling and administrative salariesMiscellaneous expenseWork in processManufacturing overheadAccounts payable | |||
j. | (Click to select)Finished goodsWork in processRent expenseManufacturing overheadMiscellaneous expenseSelling and administrative salariesSalaries and wages payableAdvertising expense | ||
(Click to select)Salaries and wages payableSelling and administrative salariesWork in processAccounts payableManufacturing overheadMiscellaneous expenseAdvertising expenseRent expense | |||
k. | (Click to select)Raw materialsSalesFinished goodsWork in processCost of goods soldAccounts receivableAccounts payableSelling and administrative salaries | ||
(Click to select)Cost of goods soldWork in processRaw materialsFinished goodsAccounts payableAccounts receivableSelling and administrative salariesSales | |||
l | (Click to select)Finished goodsWork in processAccounts payableSalaries and wages payableAccounts receivableSelling and administrative salariesSalesRaw materials | ||
(Click to select)Raw materialsCost of goods soldAccounts payableSalaries and wages payableSelling and administrative salariesWork in processAccounts receivableSales | |||
(Click to select)Salaries and wages payableCost of goods soldMiscellaneous expenseFinished goodsAccounts payableSalesRaw materialsSelling and administrative salaries | |||
(Click to select)Finished goodsAccounts receivableSelling and administrative salariesAccounts payableRaw materialsCost of goods soldMiscellaneous expenseSalaries and wages payable | |||
2. | Post your entries to T-accounts. (Don |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started