Question

Widmer Watercraft's predetermined overhead rate is 200 % of direct labor. Information on the company's production activities during May follows. a. Purchased raw materials on credit, $220,000. b. Materials requisitions record use of the following materials for the month. 48,500 34,000 Job 136 Job 137 Job 138 Job 139 19,600 22,800 6,600 131,500 19,500 Job 140 Total direct materials Indirect materials $151,000 Total materials used c. Paid $16,000 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 $12,300 10,500 38,100 39,400 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor 3,600 103,900 25,000 $128,900 Total e. Applied overhead to Jobs 136, 138, and 139 f. Transferred Jobs 136, 138, and 139 to Finished Goods. g. Sold Jobs 136 and 138 on credit at a total price of $535,00o. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance) Depreciation of factory building Depreciation of factory equipment Expired factory insurance Accrued property taxes payable $69,500 38,000 10,000 36,500 i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200 % of direct labor cost 3. Post the journal entries for the transactions to the following T-accounts, each of which started the month with a zero balance. Raw Materials Inventory Work in Process Inventory End.bal End.bal. Finished Goods Inventory Factory Overhead End bal End.bal. Cost of Goods Sold End.bal.

Answer 1

Solution 3:

	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140
Materials	$48,500.00	$34,000.00	$19,600.00	$22,800.00	$6,600.00
Labor	$12,300.00	$10,500.00	$38,100.00	$39,400.00	$3,600.00
Overhead	$24,600.00	$21,000.00	$76,200.00	$78,800.00	$7,200.00
Total cost	$85,400.00	$65,500.00	$133,900.00	$141,000.00	$17,400.00

Raw material Inventory
Event	Debit	Event	Credit
a	$220,000.00	b	$151,000.00
		Ending Balance	$69,000.00
Total	$220,000.00	Total	$220,000.00
Work In Process Inventory
Event	Debit	Event	Credit
b	$131,500.00	f	$360,300.00
d	$103,900.00	Ending Balance	$82,900.00
e	$179,600.00
i	$28,200.00
Total	$443,200.00	Total	$443,200.00
Finished Goods Inventory
Event	Debit	Event	Credit
f	$360,300.00	g	$219,300.00
		Ending Balance	$141,000.00
Total	$360,300.00	Total	$360,300.00
Cost of goods sold
Event	Debit	Event	Credit
g	$219,300.00	Ending balance	$219,300.00
Total	$219,300.00	Total	$219,300.00
Manufacturing Overhead
Event	Debit	Event	Credit
b	$19,500.00	e	$179,600.00
c	$16,000.00	i	$28,200.00
d	$25,000.00	Underapplied overhead	$6,700.00
h	$154,000.00
Total	$214,500.00	Total	$214,500.00