Question

Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:

Job 11-101	$5,450
Job 11-102	6,180
Job 11-103	4,150
Job 11-104	2,805
Factory supervision	2,800

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $27 per direct labor hour. The direct labor rate is $45 per hour.

Required:

	a. Journalize the November 30 entry to record the factory labor costs.
	b. Journalize a second entry on November 30 to apply factory overhead to production for November. *Refer to the chart of accounts for the exact wording of the account titles.

Answer 1

Solution: a. journal entry to record factory labor costs:

Date	Account Titles	Debit	Credit
Nov. 30	Work-in Process	$18,585
	Factory Overhead	$ 2,800
	Wages payable		$ 21,385

b. Journal entry to apply factory overhead to production: