Question

5. 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 $201,600 and total machine hours at 63,000. 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 $10,800 $8,500 $6,000 $25,300 Direct labor $17,600 $6,000 $4,400 $28,000 Machine hours 1,700 hours 2,400 hours 1,100 hours 5,200 hours Job 101 was completed and sold for $51,600. Job 102 was completed but not sold. Job 103 is still in process. Actual overhead costs recorded during the first month of operations totaled $11,840. A. Record the transfer of completed job 102 to finished goods inventory. B. Record the transfer of the job sold to cost of goods sold account. C. Record sales revenue and cash received. D. Record the transfer of the manufacturing overhead account balance to cost of goods sold.

Answer 1

predetermined overhead rate =			201600/63000
			3.2	per machine hour
			Job 101	Job 102	Job 103	total
Direct materials used			10,800	8,500	6,000	25,300
Direct labor			17,600	6,000	4,400	28,000
overhead applied			5440	7680	3520	16640
total			33,840	22,180	13,920	69,940
			COGS	Finished	WIP
TR	General Journal				Debit	Credit
1	Finished goods inventory				22,180
	Work in process inventory					22,180
2a)	Cost of goods sold				33,840
	Finished goods inventory					33,840
2b)	Cash				51,600
	sales revenue					51,600
3)	Manufacturing overhead				4800
	Cost of goods sold					4800
	(Applied overhead - actual overhead)
1)	predetermined overhead rate				4.1	per Machine hour
2)	total applied manufacturing overhead				16640
3)	Ending work in process inventory				13,920
4)	Gross profit				17,760
5-a)	Balance				4800
5-b)	is it over-under applied				over applied