Question

Brane Company uses normal costing in its job costing system. The company produces custom bikes for toddlers. The beginning balances (December 1) and ending balances (as of December 30) in their inventory accounts are as follows:

irect payroll for the December 31 work day. Data Table Beginning Balance 12/1 1,800 $ Ending Balance 12/30 8,200 8,700 92,500 Materials Control Work-in-Process Control Manufacturing Department Overhead Control Finished Goods Control 6,400 4,100 19,100 Print Done then click Check Answer. Clear All

A. Direct materials purchases during December were $66,000
B. Cost of good manufactured for December was $231,000.
C. No direct materials were returned to suppliers.
D. No units were started or completed on December 31 and no direct materials were requisitioned on December 31.
E. The manufacturing labor cost for December 31 working day: direct manufacturing labor, $4,150, and indirect manufacturing labor, $1,250
F. Manufacturing overhead has been allocated at 150% of direct manufacturing labor costs through December 31.

1. Prepare journal entries for the December e1 payroll:
2. Use T-accounts to compute the following:
   a. The total amount of materials requisitioned into work in process during December.
   b. The total amount of direct manufacturing labor recorded in work in process during December. (Hint, you have to solve requirement 2b and 2c simultaneously)
   c The total amount of manufacturing overhead recorded in work in process during during December
d. Ending balance in work in process, December 31
e. Costs of good sold for December before adjustments for under or overallocated manufacturing overhead.
3. Prepare closing journal entries related to manufacturing overhead. Assume that all under or overallocated manufacturing is closed directly to cost of goods sold.

Answer 1

Part 1

No.	General journal	Debit	Credit
a.	Work-in-Process Control	4150
	Manufacturing Department Overhead Control	1250
	Wages Payable Control		5400
	To recognize payroll costs
b.	Work-in-Process Control (4150*150%)	6225
	Manufacturing Overhead Allocated		6225
	To allocate manufacturing overhead

Part 2

a.	Total direct materials requisitioned into work in process during December	$59600
b.	Total direct manufacturing labor for December (69480+4150)	$73630
c.	Total manufacturing overhead allocated (recorded) in work in process (104220+6225)	$110445
d.	Ending balance in work-in-process inventory on December 31 (8700+4150+6225)	$19075
e.	Costs of good sold for December before adjustments for under or overallocated manufacturing overhead	$216000

Materials control
Beginning balance 12/1	1800	59600	Materials requisitioned
Purchases	66000
Balance 12/30	8200

Work-in-Process Control
Beginning balance 12/1		6400
Direct materials	59600
Direct manf. labor	69480		231000	Cost of goods manufactured
Manf. overhead allocated (69480*150%)	104220
Balance 12/30		8700
(a) Direct manuf. labor 12/31 payroll		4150
(b) Manuf. overhead allocated 12/31		6225
Ending balance 12/31		19075

Finished Goods Control
Beginning balance 12/1	4100	216000	Cost of goods sold
Cost of goods manufactured	231000
Balance 12/31	19100

Cost of Goods Sold
Cost of Goods Sold	216000	16695	(c) Closing entry

(110445-93750 = 16695)

Manufacturing Department Overhead Control
Balance through 12/30	92500	93750	(c) Closing entry
(a) Indirect manufacturing labor 12/31	1250

Manufacturing Overhead Allocated
(c) Closing entry	110445	104220	Balance through 12/30
		6225	(b) Manufacturing overhead allocated, 12/31

Wages Payable Control
		1250	(a) 12/31 payroll

$6400 + $59,600 + x + 1.50x – $231,000 = $8700

2.50X = 173700

X = 69480

Part 3

No.	General journal	Debit	Credit
1.	Manufacturing Overhead Allocated	110445
	Manufacturing Department Overhead Control		93750
	Cost of Goods Sold		16695