Question

Assignment 11A - Problem 1 A manufacturing company uses direct labor hours as the basis for the predetermined manufacturing overhead rate. Amounts and transactions for the year are as follows: $500,000 100,000 Estimated total manufacturing overhead Estimated total direct labor hours 40,000 Estimated total machine hours Actual total manufacturing overhead incurred (not paid) Actual direct labor costs incurred (not paid) Actual total direct labor hours $467,000 $805,000 89,405 2 3 4 39,100 Actual total machine hours Raw materials purchased on account Raw materials requisitioned to use in production General and administrative expenses incurred (not paid) Warehouse expenses incurred (not paid) Overhead applied to production Close overapplied or underapplied overhead (assume amount immaterial) $106,000 $92,000 $89,000 $64,000 16 17 18 19 20 21 22 Required: Use drop-down menus for account titles and amounts. A Record all transactions for the manufacturing company B. Calculate the total cost of the products 23 24 25 26 27 Answer: 28 A. Record the transactions. 29 30 List of Accounts Titles to Use 1. Raw materials purchased on account, $106,000. 31 Accounts Payable Administrative Expenses Manufacturing Overhead Raw Materials Inventory Wages Payable Warehouse Expenses 32 33 34 2. Raw materials requistioned to use in production, $92,000. 35 36 37 Work in Process inventory 38 3. Actual direct labor costs incurred (not paid), $805.000 List of Amounts to Use 39 19,975 40 41 64,000 42 89,000 4. Actual total manufacturing overhead incurred (not paid), $467,000. 43 92,000 44 106,000 45 153,000 46 447,025

Answer 1

A)
DATE	DESCRIPTION	DEBIT	CREDIT
a)	Raw Material Inventory	$         106,000.00
	Accounts Payable		$ 106,000.00
b)	Work in Process inventory	$           92,000.00
	Raw Material Inventory		$   92,000.00
c)	Work in Process inventory	$         805,000.00
	Wages Payable		$ 805,000.00
d)	Work in Process inventory	$         467,000.00
	Manufacturing overhead		$ 467,000.00
B) Total cost of product = 92000+805000+467000		$      1,364,000.00
Overhead applied to production		$         467,000.00
Overapplied	500000 - 467000	$           33,000.00