Question

CALCULATOR STANDARD VIEW PRINTER VERSION BACK Problem 15-01A Lott 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 prio January 1 on this job were as follows: direct materials $23,800, direct labor $14,280, and manufacturing overhead $19,040. As of January 1, Job 49 had been completed at a cost of $107,100 aw was part of finished goods inventory. There was a $17,850 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 $145,180 and $188,020, respectively. The following additional events occurred during the month. Purchased additional raw materials of $107,100 on account. 1. Incurred factory labor costs of $83,300. Of this amount $19,040 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $20,230; indirect labor $23,800; depreciation expense on equipment $14,280; and various other manufacturing overhe costs on account $19,040. 4. Assigned direct materials and direct labor to jobs as follows. 2. 3. Job No. Direct Materials Direct Labor 50 $11,900 $5,950 S1 46,410 29,750 52 35,700 23,800 Your answer is correct. Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $999,600, direct labor costs of $833,000, and direct labor hours of 23,800 for the year. Predetermined overhead rate 120 SHOW LIST OF ACCOUNTS 2 Your answer is partially correct. Try again. Prepare the journal 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 tities are automatically indented when amount is entered. Do not indent manually.) Account Tesand Erolanation Credit Debit

Answer 1

Part A

Predetermined overhead rate = Estimated total manufacturing overhead cost / direct labor cost = 982800/819000 = 120%

Part C

No.	Account titles and explanation	Debit	Credit
1	Raw Materials Inventory	107100
	Accounts Payable		107100
2	Factory Labor	83300
	Factory Wages Payable		64260
	Employer Payroll Taxes Payable		19040
3	Manufacturing Overhead	77350
	Accounts Payable		19040
	Accumulated Depreciation—Equipment		14280
	Raw Materials Inventory		20230
	Factory Labor		23800

Part D

No.	Account titles and explanation	Debit	Credit
1	Work in Process Inventory	94010
	Raw Materials Inventory (11900+46410+35700)		94010
2	Work in Process Inventory	59500
	Factory Labor (5950+29750+23800)		59500
3	Work in Process Inventory (59500*120%)	71400
	Manufacturing Overhead		71400

Part B & E

Job no.: 50
Date	Direct materials	Direct labor	Manufacturing overhead
Beg.	23800	14280	19040
Jan.	11900	5950	7140
	$35700	$20230	$26180
Cost of completed job
Direct materials			35700
Direct labor			20230
Manufacturing overhead			26180
Total cost			$82110

5950*120% = 7140

Job no.: 51
Date	Direct materials	Direct labor	Manufacturing overhead
Jan.	46410	29750	35700
	$46410	$29750	$35700
Cost of completed job
Direct materials			46410
Direct labor			29750
Manufacturing overhead			35700
Total cost			$111860

29750*120% = 35100

Job no.: 52
Date	Direct materials	Direct labor	Manufacturing overhead
Jan.	35700	23800	28560

23800*120% = 28080

Account titles and explanation	Debit	Credit
Finished Goods Inventory	193970
Work in Process Inventory (82110+111860)		193970

Part F

No.	Account titles and explanation	Debit	Credit
1	Cost of Goods Sold (107100+82110)	189210
	Finished Goods Inventory		189210
2	Accounts Receivable (145180+188020)	333200
	Sales		333200

Part G

Finished goods inventory

$111860

Job No. 51

Finished goods inventory = (107100+193970)- 189210 = $111860

Part H

Manufacturing overhead

$5950

Underapplied

Underapplied overhead = actual – applied = 77350-71400 = 5850