Question

Can you please write T-account and show me step-by-step?. Thank you

Job costing, journal entries. Donald Transport assembles prestige manufactured homes. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $31 per machine-hour in 2017). The following data (in millions) show operation costs for 2017:

Materials Control, beginning balance, January 1, 2017	$ 18
Work-in-Process Control, beginning balance, January 1, 2017	9
Finished Goods Control, beginning balance, January 1, 2017	10
Materials and supplies purchased on credit	154
Direct materials used	152
Indirect materials (supplies) issued to various production departments	19
Direct manufacturing labor	96
Indirect manufacturing labor incurred by various production departments	34
Depreciation on plant and manufacturing equipment	28
Miscellaneous manufacturing overhead incurred (ordinarily would be detailed as repairs, utilities, etc., with a corresponding credit to various liability accounts)	13
Manufacturing overhead allocated, 3,000,000 actual machine-hours	?
Cost of goods manufactured	298
Revenues	410
Cost of goods sold	294

Required

1. Prepare an overview diagram of Donald Transport’s job-costing system.

2. Prepare journal entries. Number your entries. Explanations for each entry may be omitted. Post to T-accounts. What is the ending balance of Work-in-Process Control?

3. Show the journal entry for disposing of under- or overallocated manufacturing overhead directly as a year-end writeoff to Cost of Goods Sold. Post the entry to T-accounts.

4. How did Donald Transport perform in 2017?

Answer 1

Donald Transport Requirement 1 An overview of the product-costing system is Indirect Cost Pool Manufacturing Overhead Cost Allocation Base Machine Hours Cost Object Product Indirect Costs - AA Direct Costs DM

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Requirement 2 Journal Enteries Trans. Particulars 1 Materials Control a/c Dr. To Accounts Payable Control Debit in $ Credit in $ 2 Dr. Work-in-Process Control a/c To Materials Control Manufacturing Department Overhead Control To Materials Control 4 Work-in-Process Control a/c Dr. To Wages Payable Control 5 Manufacturing Department Overhead Control To Wages Payable Control 6 Manufacturing Department Overhead Control To Accumulated Depreciation 7 Manufacturing Department Overhead Control To Various liabilities Work-in-Process Control a/c Dr. To Manufacturing Overhead Allocated 9 Finished Goods Control a/c Dr. To Work-in-Process Control 10a Cost of Goods Sold a/c Dr. To Finished Goods Control 10b. Accounts Receivable Control (or Cash) a/c Dr. To Revenues 11 Manufacturing Overhead Allocated a/c Dr. 93 Cost of Goods Sold a/c To Manufacturing Department Overhead Control Dr. Requiement 4 Gross margin = Revenues - Cost of goods sold = $410 - $295 = $115 Donald Transport's gross margin of 28% ($115 $410) is relatively small, indicating Donald Transport did fine but not particularly well in 2017. (Gross margins below 30% are generally considered small.) A company manufacturing prestige manufactured homes should have higher gross margins.

Requirement 3 The posting of entries to T-accounts is as follows: Materials Control Work-in-Process Control Bal. 18/2 298 1543 Bal. 172 152 96 93 Bal. 350 52 350 Bal. 10a. Finished Goods Control 1010a. 298 308 294 14 308 Cost of Goods Sold 294 1 Bal. 295 295 295 Manufacturing Department Overhead Control 1911 Manufacturing Overhead Allocated 938 94 Accounts Payable Control Wages Payable Control 154 Accumulated Depreciation Various Liabilities Revenues Accounts Receivable Control 410 10b 10b 410