Question

Problem 15-01A Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,400, direct labor $12,240, and manufacturing overhead $16,320. As of January 1, Job 49 had been completed at a cost of $91,800 and was part of finished goods inventory. There was a $15,300 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 $124,440 and $161,160, respectively. The following additional events occurred during the month. 1. 2. 3. dy Purchased additional raw materials of $91,800 on account. Incurred factory labor costs of $71,400. Of this amount $16,320 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $17,340; indirect labor $20,400; depreciation expense on equipment $12,240; and various other manufacturing overhead costs on account $16,320. Assigned direct materials and direct labor to jobs as follows. 4.

Answer 1

predetermined overhead rate
Estimated manufacturing overhead/total estimated direct labor costs
856800/714000
120.00%
job no 50
Date		Direct	direct	MOH
		materials	labor
beg.		20,400	12,240	16,320
Jan		10,200	5,100	6,120
		30,600	17,340	22,440
cost of completed job
Direct materials				30,600
direct labor				17,340
MOH				22,440
total cost				70,380
job no 51
Date		Direct	direct	MOH
		materials	labor
Jan		39,780	25,500	30,600
		39,780	25,500	30,600
cost of completed job
Direct materials				39,780
direct labor				25,500
MOH				30600
total cost				95,880
Job 52
Date		Direct	direct	MOH
		materials	labor
Jan		30,600	20,400	24,480
No	Account titles & Explanations				Debit	Credit
1)	Raw materials inventory				91,800
	Accounts payable					91,800
2)	Factory labor				71,400
	Factory wages payable					55,080
	employer payroll taxes payable					16,320
3)	manufacturing overhead				66,300
	raw materials inventory					17,340
	Factory labor					20,400
	Accumulated depreciation					12,240
	Accounts payable					16,320
No	Account titles & Explanations				Debit	Credit
1)	Work in process inventory				80,580
	Raw materials inventory					80,580
2)	work in process inventory				51,000
	Factory labor					53,000
3)	Work in process inventory				61200
	manufacturing overhead					61,200
	Account titles & Explanations				Debit	Credit
	finished goods inventory				166,260
	work in process inventory					166,260
	(job 50 +job 51 =
No	Account titles & Explanations				Debit	Credit
	Accounts receivable				285600
	sales					285,600
	cost of goods sold
	finished goods inventory				162,180
	(job 49+job 50)					162,180
finished goods inventory			95,880	Job No 51
			finished goods inventory
	opening		91,800	COGS		162,180
	WIP		166,260
	end bal		95,880
manufacturing overhead			5,100	under applied
		manufacturing overhead
	Actual		66,300	Applied		61,200
	bal		5,100