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The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing. Purchased $54,000 in materials on account. Issued $1,800
The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing.
- Purchased $54,000 in materials on account.
- Issued $1,800 in supplies from the materials inventory to the production department.
- Paid for the materials purchased in transaction (1).
- Issued $25,800 in direct materials to the production department.
- Incurred wage costs of $45,000, which were debited to Payroll, a temporary account. Of this amount, $13,800 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $31,200 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll.
- Recognized $24,000 in fringe benefit costs, incurred as a result of the wages paid in (5).This$24,000was debited to Payroll and credited to Fringe Benefits Payable.
- Analyzed the Payroll account and determined that 70 percent represented direct labor; 20 percent, indirect manufacturing labor; and 10 percent, administrative and marketing costs.
- Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $32,700.
- Applied overhead on the basis of 160 percent of direct labor costs.
- Recognized depreciation of $17,550 on manufacturing property, plant, and equipment.
Required:
a.Prepare journal entries to record these transactions.
b.The balances that appeared in the accounts of Apex Manufacturing are shown as follows.
BeginningEndingMaterials Inventory$56,025Work-in-Process Inventory12,825Finished Goods Inventory62,550$50,400Cost of Goods Sold100,275
Prepare T-accounts to show the flow of costs during the period.
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