Question

Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows. Purchased raw materials on credit, $260,000. Materials requisitions record use of the following materials for the month. Job 136 $ 50,000 Job 137 32,500 Job 138 20,200 Job 139 22,400 Job 140 6,400 Total direct materials 131,500 Indirect materials 21,000 Total materials used $ 152,500 Paid $15,750 cash to a computer consultant to reprogram factory equipment. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 $ 12,000 Job 137 10,800 Job 138 37,700 Job 139 39,400 Job 140 3,400 Total direct labor 103,300 Indirect labor 24,000 Total $ 127,300 Applied overhead to Jobs 136, 138, and 139. Transferred Jobs 136, 138, and 139 to Finished Goods. Sold Jobs 136 and 138 on credit at a total price of $535,000. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building $ 68,500 Depreciation of factory equipment 38,500 Expired factory insurance 11,000 Accrued property taxes payable 35,000 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.

Answer 1

		job 136	job 137	job138	job139	job140	total
Materials		50,000	32,500	20,200	22,400	6,400	131,500
labor		12,000	10,800	37,700	39,400	3,400	103,300
overhead		24,000	21600	75400	78800	6800	206,600
total		86,000	64,900	133,300	140,600	16,600	441,400
2)	TR	General Journal				Debit	Credit
	a)	Raw materials inventory				260,000
		Accounts payable					260,000
	b)	Work in process inventory				131,500
		Factory overhead				21,000
		Raw materials inventoy					152,500
	c)	Factory overhead				15,750
		cash					15,750
	d)	Work in process inventory				103,300
		Factory overhead				24,000
		Cash					127,300
	e)	Work in process overhead				178,200
		Factory overhead					178,200
	f)	finished goods inventory				359,900
		Work in process inventory					359,900
	g)	Accounts receivable				535,000
		Sales					535,000
		cost of goods sold				219,300
		finished goods inventory					219,300
	h)	Factory overhead				153,000
		Accumulated depreciation-factory building					68,500
		Accumulated depreciation-factory equipment					38,500
		prepaid insurance					11,000
		property taxes payable					35,000
	i)	work in process inventory				28,400
		Factory overhead					28,400
	T- Accounts
Raw materials inventory					Work in process inventory
a.	260,000				b.	131,500
		152,500	b.		d.	103,300
					e.	178,200
end bal	107,500						359,900	f.
					i.	28400
					bal	81,500
Factory overhead					finished goods inventory
b.	21,000				f.	359,900
c.	15,750						219,300	g.
d.	24,000				bal	140,600
		178,200	e.
h.	153,000
		28,400	i
bal	7,150
cost of goods sold
g.	219,300
end bal	219,300
Report of Job costs
Work in process inventory
job 137			64,900
job 140			16,600
Balance			81,500
finished goods inventory
job 139			140,600
Balance			140,600
cost of goods sold
job 136			86,000
job 138			133,300
balance			219,300