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Watkins Machinery Company uses a normal job costing system. The company has the following partial trial balance information for March, the last month of its
Watkins Machinery Company uses a normal job costing system. The company has the following partial trial balance information for
March, the last month of its fiscal year:
Materials inventory $;$; Indirect materials, $ $
Workinprocess inventory this is Job
Finished goods inventory this is Job
These transactions relate to the month of March:
a Purchased direct materials and indirect materials with the following summary of receiving reports:
b Issued direct materials and indirect materials with this summary of requisitions:
c Factory labor incurred is summarized by these time tickets:
d Factory utilities, factory depreciation, and factory insurance incurred is summarized as follows:
e Factory overhead costs were applied to jobs at the predetermined rate of $ per machine hour. Job incurred machine
hours; Job used machine hours.
f Job was completed; Job was still in process at the end of March.
g Job and Job were shipped to customers during March. Both jobs had gross margins of based on manufacturing cost.
h The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of March.
Required:
Prepare journal entries to record the transactions for the events from parts a through g
Compute the ending balance of the Workinprocess inventory account.
Compute the overhead variance and indicate whether it is overapplied or underapplied.
Close the overhead variance to the Cost of goods sold account.
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