THIS QUESTION HAS MULTIPLE STEPS.
1) Pedriani Company uses a job order cost system and applies overhead on the basis of direct labor hours. On Jan01, 2017, Job No. 25 was the only job in process. Costs incurred prior to Jan01 on this job were as follows: direct materials $10,000; direct labor $6,000; and manufacturing overhead $9,000. Job No. 23 had been completed at a cost of $42,000 and was part of finished goods inventory. There was a $5,000 balance in the Raw Materials Inventory account.
During the month of January, the company began production on Jobs 26 and 27, and completed Jobs 25 and 26. Jobs 23 and 25 were sold on account during the month for $63,000 and $74,000, respectively. The following additional events occurred during the month.
EDIT) HOURS: Job #25, 200; Job #26, 800; and Job #27, 600.
INSTRUCTIONS:
A: Calculate the predetermined overhead rate for the year 2017, assuming Company estimates total manufacturing overhead costs of $440,000, direct labor costs of $300,000, and direct labor hours of 20,000 for the year. Note: Use “Direct Labor Hours” to calculate the predetermined overhead rate.
B: Prepare entries to record: purchase of raw materials, factory labor costs incurred, and the manufacturing overhead costs incurred during the month of JAN.
C: Prepare entries to record the assignment of direct materials, direct labor, and mfg overhead costs to production. (In assigning overhead, use the rate calculated in “a”). Post all costs to the job cost sheets as necessary.
D: Total the job cost sheets for any job(s) completed during the month. Prepare the entry (or entries) to record the completion of any job(s) during JAN.
E: Prepare the journal entry (or entries) to record the sale of any job(s) during JAN.
F: What is the balance in the Work in Process Inventory account at the end of JAN?
G: What is the amount of over- or underapplied overhead?
Answer-A:
Predetermined Overhead Rate = $440,000 / 20,000 = $22.00 per DLH
Answer-B:
Answer-C:
Answer-D:
THIS QUESTION HAS MULTIPLE STEPS. 1) Pedriani Company uses a job order cost system and applies...
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