Question
Widmer Watercrafts predetermined overhead rate for year 2015 is 200% of direct labor. Information on the companys production activities during May 2015 follows. a. Purchased
Widmer Watercrafts predetermined overhead rate for year 2015 is 200% of direct labor. Information on the companys production activities during May 2015 follows. |
a. | Purchased raw materials on credit, $220,000. |
b. | Materials requisitions record use of the following materials for the month. |
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Job 136 | $ | 49,000 |
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Job 137 |
| 33,500 |
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Job 138 |
| 19,600 |
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Job 139 |
| 22,600 |
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Job 140 |
| 7,000 |
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Total direct materials |
| 131,700 |
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Indirect materials |
| 21,500 |
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Total materials used | $ | 153,200 |
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c. | Paid $15,500 cash to a computer consultant to reprogram factory equipment. |
d. | Time tickets record use of the following labor for the month. These wages were paid in cash. |
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Job 136 | $ | 12,200 |
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Job 137 |
| 10,600 |
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Job 138 |
| 37,900 |
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Job 139 |
| 39,400 |
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Job 140 |
| 3,600 |
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Total direct labor |
| 103,700 |
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Indirect labor |
| 25,000 |
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Total | $ | 128,700 |
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e. | Applied overhead to Jobs 136, 138, and 139. |
f. | Transferred Jobs 136, 138, and 139 to Finished Goods. |
g. | Sold Jobs 136 and 138 on credit at a total price of $530,000. |
h. | The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). |
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Depreciation of factory building | $ | 68,000 |
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Depreciation of factory equipment |
| 38,000 |
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Expired factory insurance |
| 11,000 |
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Accrued property taxes payable |
| 37,000 |
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i. | Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. |
2. | Prepare journal entries to record the events and transactions a through i. |
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