Question

C-F

Coronado Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 24,000, direct labor $ 14,400, and manufacturing overhead $ 19,200. As of January 1, Job 49 had been completed at a cost of $ 108,000 and was part of finished goods inventory. There was a $ 18,000 balance in the Raw Materials Inventory account. During the month of January, Coronado Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold during the month. The following additional events occurred during the month. 1. Purchased additional raw materials of $ 108,000 on account. 2. Incurred factory labor costs of $ 84,000. 3. Incurred manufacturing overhead costs as follows: indirect materials $ 20,400; indirect labor $ 24,000; depreciation expense on equipment $ 14,400; and various other manufacturing overhead costs on account $ 19,200. 4. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor $ 12,000 46,800 $ 6,000 30,000 24,000 36,000 Your answer is correct. Calculate the predetermined overhead rate for 2020, assuming Coronado Company estimates total manufacturing overhead costs of $1,008,000, direct labor costs of $ 840,000, and direct labor hours of 24,000 for the year. (Round answer to the nearest whole percent, e.g. 25%.) Predetermined overhead rate 120 %

Answer 1

CR Particulars DR Raw materials $ 1,08,000.00 Accounts payable To record the raw materials purchased on credit $1,08,000.00 84,000.00 Factory labor $ Factory wages payable To record the factory labor costs incurred $ 84,000.00 Manufacturing overhead $ 78,000.00 Raw materials Factory labor Depreciation Accounts payable To record the manufacturing overhead costs incurred $ $ $ $ 20,400.00 24,000.00 14,400.00 19,200.00 Work in progress $ 94,800.00 Raw materials To record the assignment of direct materials $ 94,800.00 60,000.00 Work in progress $ Factory labor To record the assignment of direct labor $ 60,000.00 =60000*1.2 Work in progress $ 72,000.00 Manufacturing overhead $ 72,000.00 To record the assignment of manufacturing overhead costs Total manufacturing overhead costs Total direct labor costs Predetermined overhead rate $ 10,08,000.00 $ 8,40,000.00 $ 1.20 =1008000/840000 =82800+112800 Finished goods $ 1,95,600.00 Work in progress To record the completion of production $ 1,95,600.00 $ 1,90,800.00 =108000+82800 Cost of goods sold Finished goods To record the cost of goods sold $ 1,90,800.00