Question

Problem 4-53. Overhead Application and Job-Order Costing
Heurion Company is a job-order costing firm that uses a plantwide overhead rate based on direct labor hours. Estimated information for the year is as follows:

Overhead   $789,000
Direct labor hours   100,000

Heurion worked on five jobs in July. Data are as follows:

Job 741   Job 742 Job 743 Job 744 Job 745
Balance, July 1 $29,870    $55,215    $27,880    $ 0     0 
Direct materials $25,500    $39,800    $14,450    $13,600    $  8,420 
Direct labor cost $61,300    $48,500    $28,700    $24,500    $21,300 
Direct labor hours   4,000  3,400  1,980  1,600  1,400 

By July 31, Jobs 741 and 743 were completed and sold. The remaining jobs were in process.

Prepare journal entries for the month of July with the following CHANGES. First, assume that the company uses a plantwide overhead rate based on direct labor dollars. Also assume that estimated information for the year includes Direct labor dollars of $1,642,000. Finally, assume that the company sells its jobs at a selling price equal to (cost + 25% of cost markup).

i need the journal entries as requested in the problem

Answer 1

Journal entries for the problem? Answer: Credit Debit $ 101,770.00 Date Account Titles and Explanation Jul-31 Work in Process Inventory a/c To Direct materials a/c (To record raw materials used) (25500+39800+14450+13600+8420) $ 101,770.00 $184,300.00 $184,300.00 Jul-31 Work in Process Inventory a/c To Direct labor a/c (To record factory labor used) (61300+48500+28700+24500+21300) $ 88,558.28 $ 88,558.28 Jul-31 Work in Process Inventory a/c To Manufacturong overhead a/c (To record manufacturing overhead) (789000/1642000X184300) $ 190,573.46 $ 190,573.46 Jul-31 Finished goods inventory a/c To Work in Process Inventory a/c (To record job completed) (29870+25500+61300+27880+14450 +28700+(4000+1980)*789000/1642000)

$ 190,573.46 Jul-31 Cost of goods sold a/c To Finished goods inventory a/c (To record cost of goods sold) $ 190,573.46 $ 238,216.82 Jul-31 Accounts receivable a/c To Sales revenue a/c (To record sales made) - 125% of cost $ 238,216.82 Please give thumbsup button if this solution helped. If you need any further explanation, kindly request in the comment section, glad to be helpful.