Question
The following events occurred over the course of a year at Crane Corp., which uses a job order costing system: 1. Direct materials purchases totaled
The following events occurred over the course of a year at Crane Corp., which uses a job order costing system:
1. Direct materials purchases totaled $590,000. Crane Corp tracks its direct materials separately from its indirect materials. Purchases were made on account.
2. $132,000 of indirect materials were used in production. Crane uses a separate Supplies Inventory account for indirect materials.
3. $562,000 of direct materials were used in production.
4. The direct labor payroll was $791,000 (credit Wages Payable).
5. Other manufacturing overhead costs incurred during the year totaled $670,000.
6. Crane applies overhead based on a predetermined overhead rate of $22 per machine hour. The company used 49,000 machine hours during the year.
7. During the year, Crane transferred goods costing $2,410,000 into the Finished Goods Inventory account.
8. Crane sold products with a manufacturing cost of $2,398,000 to customers during the year.
Prepare journal entries to record these events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Post entries in order presented in the problem.)
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