Question

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $23,200, direct labor $13,920, and manufacturing overhead S18,560. As of January 1, Job No. 49 had been completed at a cost of S104,400 and was part of finished goods inventory. There was a $17,400 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 $141,520 and $183,280 respectively. The following additional events occurred during the month. 1. 2. 3. Purchased additional raw materials of $104,400 on account. Incurred factory labor costs of $81,200. Of this amount $18,560 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $19,720; ındirect labor $23,200; depreciation expense on equipment $13,920; and various other manufacturing overhead costs on account $18,560 Assigned direct materials and direct labor to jobs as follows. 4. Job No 50 51 Direct Materials Direct Labor $11,600 45,240 34,800 $5,800 29,000 23,200 Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $974,400, direct labor costs of $812,000, and direct labor hours of 23,200 for the year. (Round answer to the nearest whole percent, e.g. 2596) Predetermined overhead rate SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job No. 50 Job No. 50 Date Beg Direct Materials Direct Labor Manufacturing Overhead

Answer 1

predetermined overhead rate
Estimated manufacturing overhead/total estimated direct labor costs
974400/812000
120.00%
job no 50
Date		Direct	direct	MOH
		materials	labor
beg.		23,200	13,920	18,560
Jan		11,600	5,800	6,960
		34,800	19,720	25,520
cost of completed job
Direct materials				34,800
direct labor				19,720
MOH				25,520
total cost				80,040
job no 51
Date		Direct	direct	MOH
		materials	labor
Jan		45,240	29,000	34,800
		45,240	29,000	34,800
cost of completed job
Direct materials				45,240
direct labor				29,000
MOH				34800
total cost				109,040
Job 52
Date		Direct	direct	MOH
		materials	labor
Jan		34,800	23,200	27,840
No	Account titles & Explanations				Debit	Credit
1)	Raw materials inventory				104,400
	Accounts payable					104,400
2)	Factory labor				81,200
	Factory wages payable					62,640
	employer payroll taxes payable					18,560
3)	manufacturing overhead				75,400
	raw materials inventory					19,720
	Factory labor					23,200
	Accumulated depreciation					13,920
	Accounts payable					18,560
No	Account titles & Explanations				Debit	Credit
1)	Work in process inventory				91,640
	Raw materials inventory					91,640
2)	work in process inventory				58,000
	Factory labor					53,000
3)	Work in process inventory				69600
	manufacturing overhead					69,600
	Account titles & Explanations				Debit	Credit
	finished goods inventory				189,080
	work in process inventory					189,080
	(job 50 +job 51 =
No	Account titles & Explanations				Debit	Credit
	Accounts receivable				324800
	sales					324,800
	cost of goods sold
	finished goods inventory				184,440
	(job 49+job 50)					184,440
finished goods inventory			109,040	Job No 51
			finished goods inventory
	opening		104,400	COGS		184,440
	WIP		189,080
	end bal		109,040
manufacturing overhead			5,800	under applied
		manufacturing overhead
	Actual		75,400	Applied		69,600
	bal		5,800