Question

Required information (The following information applies to the questions displayed below) Widmer Watercraft's predetermined overhead rate for the year 2017 is 200% of direct labor Information on the company's production activities during May 2017 follows. 5. Purchased raw materials on credit, $220,000 b. Materials requisitions record use of the following materials for the month Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials used $ 48,500 32,000 20,200 22,400 6,600 129,700 20,500 $150, 200 c. Paid $15,250 cash to a computer consultant to reprogram factory equipment d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor Total $ 12,200 10,800 37,700 39,000 3,000 102,700 26,500 $129,200 e. Applied overhead to Jobs 136, 138, and 139 1. Transferred Jobs 136, 138, and 139 to Finished Goods. 9. Sold Jobs 136 and 138 on credit at a total price of $530,000 h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance) Depreciation of factory building $68,000 Depreciation of factory 37,500 equipment Expired factory insurance 11,080 Accrued property taxes payable 37,000 1. Applied overhead at month-end to the Work in Process Inventory account Lobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost

Answer 1

Solution:

	Raw Materials Inventory					Work in Process Inventory
a.	$220,000	$150,200	b.		b.	$129,700	$357,800 ($85,100 + $133,300 + $139,400)	f.
					d.	$102,700
					e.	$177,800 ($12,200 + $37,700 + $39,000) × 200%
End Bal.	$69,800				i	$27,600 ($13,800 + $3,000) × 200%
					End Bal.	$80,000
	Factory Overhead					Finished Goods Inventory
b.	$20,500				f.	$357,800	$218,400 ($85,100 + $133,300)	g.
c.	$15,250	$177,800	e.
d.	$26,500	$27,600	i.
h.	$153,500 ($68,000 + $37,500 + $11,000 + $37,000)				End. Bal.	$139,400
End. Bal.	$10,350
	Cost of Goods Sold
g.	$218400
End. Bal.	$218,400

* According to f, job 136, 138 and 139 worked during the month.

	Job No. 136	Job No. 138	Job No. 139
Materials	$48,500	$20,200	$22,400
Labor	$12,200	$37,700	$39,000
Overhead (labor × 200%)	$24,400	$75,400	$78,000
Total	$85,100	$133,300	$139,400

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