Question

*GO for Est OH Cost + hours-amt ins text to Graded Problems Problems * Figure out amt overneod & apply it Job Order Costing (15 pts.) est. The Fantasy Company started four jobs last month. All of the jobs were started, Jobs 1010, 1012, and 1013 were completed and Jobs 1010 and 1013 were sold for $387,000. Factory overhead cost are calculated on direct labor hours. Estimated OH costs were 555,200 and the estimated direct labor hours were 22,000. Actual overhead costs were $55,800 Add Job DM Costs DL Costs OH Applied Total Costs 1010 $45.000 $72.000 8.000 1011 59.000 77,000 7,000 1012 35,000 30,000 3,000 1013 26,000 40,000 5,000 Prepare journal entries to record the following activity. 1. Purchased raw materials on account for $190,300 and move it into production. (RM costs that are not direct will be recorded as indirect costs) 2. Incurred and paid factory labor costs of $240,500 cash: (labor costs that are not direct will be indirect costs) 3. Recorded factory depreciation, $5,300. 4. Incurred factory utilities costs of $3,700;this amount is still payable 5. Calculate the predetermined overhead rate, and apply the appropriate amount to production 6. Move all the completed jobs to finished goods 7. Record the sale of the finished jobs 8. Adjust the FOH account

This is for my Managerial Accounting class. I need to complete the Job Order Costing journal entries... Please disregard my notes. I need help/answers. Thank you in advance!

Answer 1

Predetermined overhead rate = Estimated OH costs/Estimated direct labor hours = $55200/22000 = $2.51 per direct labor hour

Note: The overhead rate has been rounded off to 2 decimal places in the absence of specific instructions regarding rounding off. Answers could vary due to any other rounding off.

Transaction	Account Titles and Explanation	Debit	Credit
1	Raw materials inventory	190300
	Accounts payable		190300
	(To record raw materials purchased on account)
	Work in process inventory	165000
	Factory overheads	25300
	Raw materials inventory		190300
	(To record raw materials issued to production)
2	Work in process inventory	219000
	Factory overheads	21500
	Cash		240500
	(To record factory labor costs paid)
3	Factory overheads	5300
	Accumulated depreciation		5300
	(To record factory depreciation)
4	Factory overheads	3700
	Utilities payable		3700
	(To record factory utilities costs incurred)
5	Work in process inventory	57730
	Factory overheads		57730
	(To record factory overheads applied)
6	Finished goods inventory ($137080 + $72530 + $78550)	288160
	Work in process inventory		288160
	(To record jobs completed)
7	Accounts receivable/Cash	387000
	Sales revenue		387000
	(To record jobs sold)
	Cost of goods sold ($137080 + $78550)	215630
	Finished goods inventory		215630
	(To record cost of jobs sold)
8	Factory overheads ($57730 - $55800)	1930
	Cost of goods sold		1930
	(To close overapplied factory overheads)

Working:

Job #	DM Costs	DL Costs	OH Applied	Total Costs
1010	45000	72000	20080	137080
1011	59000	77000	17570	153570
1012	35000	30000	7530	72530
1013	26000	40000	12550	78550
Total	165000	219000	57730	441730