Question

Tyler Tooling Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $239,020 and total machine hours at 62,900. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job: Job 101 Job 102 Job 103 Total Direct materials used $ 11,900 $ 7,500 $ 4,200 $ 23,600 Direct labor $ 17,300 $ 5,400 $ 4,400 $ 27,100 Machine hours 1,700 hours 2,900 hours 1,000 hours 5,600 hours Job 101 was completed and sold for $51,000. Job 102 was completed but not sold. Job 103 is still in process Actual overhead costs recorded during the first month of operations totaled $17,180. Required: 1. Prepare a journal entry showing the transfer of Job 102 into Finished Goods Inventory upon its completion. 2. Prepare the journal entries to recognize the sales revenue and cost of goods sold for Job 101. 3. Prepare the journal entry to transfer the balance of the Manufacturing Overhead account to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round your intermediate calculations.) View transaction list Journal entry worksheet < A B C D Dacard the transfer of camnlatadinh 10 ta finichad nende inuantan,

Answer 1

Answer 1:

A. Journal entry is:

Transaction General Journal Debit Credit Finished Goods Inventory $23,920 01 Work in process inventory $23,920 |(to record transfer of completed finished goods)

Working:

Predetermined overhead rate = Estimated manufacturing overhead / Estimated machine hours = 239020 / 62900 = $3.80 per machine hour

Applied overhead to Job 101 = 1700 * 3.80 = $6,460

Applied overhead to Job 102 = 2900 *3.80 = $11,020

Applied overhead to Job 103 = 1000 * 3.80 = $3,800

Costs are calculated as below:

Job 101 Job 102 Job 103 Total $11,900 $7,500 $4,200 $23,600 Direct material used $17,300 $5,400 $4,400 $27,100 Direct labor Overhead applied $3,800 $12,400 In process Cost of Goods sold Finished Goods Work in process $6,460 $35,660 $11,020 $21,280 $71,980 $23,920 Total cost Status Sold Completed Account

Answer 2:

B. Journal entry is:

Transaction General Journal Debit Credit Cost of Goods Sold $35,660 02a Finished Goods Inventory $35,660 (to record cost of goods sold)

C. Journal entry to record sale:

General Journal Transaction Debit Credit $51,000 02b Cash $51,000 Sales Revenue (to record sale on cash)

Answer 3:

Actual overhead = $17,180

Applied overhead = $21280 (please refer to table in answer 1 above)

Over-applied = 21280 - 17180 = $4,100

D. Journal entry is:

Debit Transaction General Journal Credit Manufacturing Overhead $4,100 03 $4,100 Cost of Goods Sold (to record closure of over-applied overhead to cost of goods sold)