Question

Problem 2-1A (Video) Latt Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Jab 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,600, direct labar $12,360, and manufacturing overhead $16,480. As of January 1, Job 49 had been carnpleted at a cost of $92,700 and was part of finished goods inventory. There was a $15,450 balance in the Raw Materials Inventory account. During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $125,660 and $162,740, respectively. The following additional events pccurred during the manth. 1. Purchased additional raw materials of $92,700 on account. 2. Incurred factory labor costs of $72,100. Of this amount $16,480 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: Indirect materials $17,510; Indirect labor $20,600; depreciation expense on equipment $12,360; and various other manufacturing overhead costs on account $16,480. 1. Assigned direct materials and direct labor to jobs as follows. Job No. 50 Direct Materials $10,300 40,170 30,900 Direct Labor $5,150 25,750 20,600 51 52 Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs or $865,200, direct labor costs of $721,000, and direct labor hours of 20,600 for the year. Predetermined overhead rete 120% SHOW LIST OF ACCOUNTS Messages https://messages.android.com LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK YTOCOSTAR PROBLEM Prepare the joumal entries to record (1) the purchase of raw materials, (2) the factory labor costs incurred, and (3) the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit No. Account Titles and Explanation (1) Raw Materials Inventory Debit 92700 Accounts Payable 92200 72100 55620 16840 (2) Factory Labor Factory Wages Payable Employer Payroll Taxes Payable (3) Manufacturing Overhead Raw Materials Inventory Factory Labor Accumulated Depreciation-Equipr 66950 17510 20600 12360

Answer 1

predetermined overhead rate
Estimated manufacturing overhead/total estimated direct labor costs
865200/721000
120.00%
job no 50
Date		Direct	direct	MOH
		materials	labor
beg.		20,600	12,360	16,480
Jan		10,300	5,150	6,180
		30,900	17,510	22,660
cost of completed job
Direct materials				30,900
direct labor				17,510
MOH				22,660
total cost				71,070
job no 51
Date		Direct	direct	MOH
		materials	labor
Jan		40,170	25,750	30,900
		40,170	25,750	30,900
cost of completed job
Direct materials				40,170
direct labor				25,750
MOH				30900
total cost				96,820
Job 52
Date		Direct	direct	MOH
		materials	labor
Jan		30,900	20,600	24,720
No	Account titles & Explanations				Debit	Credit
1)	Raw materials inventory				92,700
	Accounts payable					92,700
2)	Factory labor				72,100
	Factory wages payable					55,620
	employer payroll taxes payable					16,480
3)	manufacturing overhead				66,950
	raw materials inventory					17,510
	Factory labor					20,600
	Accumulated depreciation					12,360
	Accounts payable					16,480
No	Account titles & Explanations				Debit	Credit
1)	Work in process inventory				81,370
	Raw materials inventory					81,370
2)	work in process inventory				51,500
	Factory labor					53,000
3)	Work in process inventory				61800
	manufacturing overhead					61,800
	Account titles & Explanations				Debit	Credit
	finished goods inventory				167,890
	work in process inventory					167,890
	(job 50 +job 51 =entry for completion of job)
No	Account titles & Explanations				Debit	Credit
	Accounts receivable				288400
	sales					288,400
	cost of goods sold
	finished goods inventory				163,770
	(job 49+job 50)					163,770
finished goods inventory			96,820	Job No 51
			finished goods inventory
	opening		92,700	COGS		163,770
	WIP		167,890
	end bal		96,820
manufacturing overhead			5,150	under applied
		manufacturing overhead
	Actual		66,950	Applied		61,800
	bal		5,150