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 $18,560. As of January 1, Job No. 49 had been completed at a cost of $104,400 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. Purchased additional raw materials of $104,400 on account. 1. 2. 3. 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; indirect labor $23,200; depreciation expense on equipment $13,920; and various other manufacturing overhead costs on account $18,560 4. Assigned direct materials and direct labor to jobs as follows. Job No 50 51 52 Direct Materials Direct Labor $11,600 45,240 34,800 $5,800 29,000 23,200 Your answer is correct. 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. 25%.) Predetermined overhead rate

I need help! The red ones are incorrect.

Answer 1

		Job No. 51
		Date		Direct Materials		Direct Labor		Manufacturing Overhead
		Jan.		$45,240 $45,240		$29,000 $29,000		*$34,800 **$34,800**
		Cost of completed job           Direct materials..........................................................................................         $ 45,240           Direct labor.................................................................................................            29,000           Manufacturing overhead..........................................................................             34,800 Total cost...............................................................................................................         $109,040

Raw Materials Inventory...............................................................................         104,400

                    Accounts Payable........................................................................                               104,400

          Factory Labor.......................................................................................           81,200

                    Factory Wages Payable..............................................................                                 62,640

                    Employer Payroll Taxes Payable..............................................                                 18,560

          Manufacturing Overhead....................................................................           75,400

                    Accounts Payable........................................................................                                 18,560

                    Accumulated Depreciation.........................................................                                 13,920

                    Raw Materials Inventory...........................................................                                 19,720

                    Factory Labor.............................................................................                                 23,200

          Work in Process Inventory..................................................................           91,640

                    Raw Materials Inventory

                      ($11,600 + $45,240 + $34,800)................................................                                 91,640

          Work in Process Inventory..................................................................           58,000

                    Factory Labor ($5,800 + $29,000 + $23,200)...........................                                 58,000

          Work in Process Inventory..................................................................           69,600

                    Manufacturing Overhead

                      ($58,000 X 120% of direct labor costs).................................                                 69,600

Finished Goods Inventory.................................................................................... 189,080

                    Work in Process Inventory...........................................................................            189,080

Accounts Receivable............................................................................................. 324,800

                    Sales ($141,520 + $183,280)...........................................................................            324,800

         

          Cost of Goods Sold..................................................................................... 184,440

                    Finished Goods Inventory

                      ($104,400 + $80,040)..................................................................................            184,440

Finished Goods inventory=109,040

The balance in this account consists of the cost of completed Job No. 51 which has not yet been sold.