Question

Prepare journal entries to summarize 2017 transactions: as your final entry, dispose of the year-end under- or overallocatwd manufacturing overhead as a write-off to the Cost of Goods Sold account. Assume COGS given $4,020 does not include the write off of over allocated manufacturing overhead.

SRS COST DATA Direct materials and supplies purchased on credit: $800 Direct materials used: $710 Indirect materials issued to various production departments: $100 Direct manufacturing labor: $1.300 Indirect manufacturing labor incurred by various production departments: S900 Depreciation on building and manufacturing equipment: $400 Miscellaneous manufacturing overhead incurred by various production departments: $550 o (Ordinarily, this would be detailed as repairs, photocopying, utilities, etc.) Manufacturing overhead allocated at 160% of direct manufacturing labor costs: ? Cost of goods manufactured: $4,120 Revenues: S8,000 Cost of goods sold (before adjustment for under- or overallocated manufacturing overhead): $4,020 Inventories, December 31, 2016 (not 2017): o Materials control: $100 o Work- o Finished goods control: S500 in-process control: S60

Answer 1

Event General Journal Debit Credit Remarks and Workings 1) Raw Materials & Supplies Inventory $800 Accounts Payable Work in Process Inventory Manufacturing Overhead $800(To record Raw Materials and Supplies purchased on account) $710 $100 2) Raw Materials & Supplies Inventory 810 (To record raw materials requisitioned) 3) Work in Process Inventory $1,300 Manufacturing Overhead $900 $2,200 (To record direct and indirect labor used in production) $400(To record depreciation on building and mfg. equipment) $550 (To record repairs, photocopying, utilities, etc. used in production) 2,080(To record mfg. overhead applied to the production) $4,120(To record transfer of WIP inventory to finished goods) Wages Payable (or Wages Expense) 4) Manufacturing Overhead $400 Accumulated Depreciation-Build. & Mfg. Equip 5) 6) Work in Process Inventory 7) Manufacturing Overhead $550 Various Accounts $2,080 (160% of direct labor costs $1,300 x 160%-$2,080) Manufacturing Overhead Finished Goods Inventory $4,120 [Ref: Workings] Work in Process Inventory 8-a) Cash (or Accounts Receiv $8,000 Sales Revenue To record revenue earned by selling finished products)