Question

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2020, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $21,800, direct labor $13,080, and manufacturing overhead $17,440. As of January 1, Job 49 had been completed at a cost of $98,100 and was part of finished goods inventory. There was a $16,350 balance in the Raw Materials Inventory account. 

During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $132,980 and $172,220, respectively. The following additional events occurred during the month. 

1. Purchased additional raw materials of $98,100 on account. 
2. Incurred factory labor costs of $76,300. Of this amount $17,440 related to employer payroll taxes.
3. Incurred manufacturing overhead costs as follows:
 indirect materials $18,530; indirect labor $21,800; depreciation expense on equipment $13,080; and various other manufacturing overhead costs on account $17,440. 4. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,900 $5,450 51 42,510 27,250 52 32,700 21,800

Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $915,600, direct labor costs of $763,000, and direct labor hours of 21,800 for the year.

Predetermined overhead rate % SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare the journal entries to record (1) the purchase of raw materials, (2) the factory labor costs incurred, and (3) the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare the journal entries to record the assignment of (1) direct materials, (2) direct labor, and (3) manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (2) (3) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50. Post all costs to the job cost sheets as necessary. Job No. 50 Date Direct Materials Direct Labor Manufacturing Overhead Beg. $ $ $ Jan. $ $ $ Cost of completed job Direct materials $ Direct labor Manufacturing overhead Total cost $ Job No. 51 Date Direct Materials Direct Labor Manufacturing Overhead Jan. $ $ $ $ $ $ Cost of completed job Direct materials $ Direct labor Manufacturing overhead Total cost $ Job No. 52 Date Direct Materials Direct Labor Manufacturing Overhead Jan. $ $ $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare the journal entry to record the completion of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare the journal entries to record the sale of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (1) (To record sale of jobs) (2) (To record cost of jobs) SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of? Finished Goods Inventory 

Answer 1

predetermined overhead rate
Estimated manufacturing overhead/total estimated direct labor costs
915600/763000
120.00%
job no 50
Date		Direct	direct	MOH
		materials	labor
beg.		21,800	13,080	17,440
Jan		10,900	5,450	6,540
		32,700	18,530	23,980
cost of completed job
Direct materials				32,700
direct labor				18,530
MOH				23,980
total cost				75,210
job no 51
Date		Direct	direct	MOH
		materials	labor
Jan		42,510	27,250	32,700
		42,510	27,250	32,700
cost of completed job
Direct materials				42,510
direct labor				27,250
MOH				32700
total cost				102,460
Job 52
Date		Direct	direct	MOH
		materials	labor
Jan		32,700	21,800	26,160
No	Account titles & Explanations				Debit	Credit
1)	Raw materials inventory				98,100
	Accounts payable					98,100
2)	Factory labor				76,300
	Factory wages payable					58,860
	employer payroll taxes payable					17,440
3)	manufacturing overhead				70,850
	raw materials inventory					18,530
	Factory labor					21,800
	Accumulated depreciation					13,080
	Accounts payable					17,440
No	Account titles & Explanations				Debit	Credit
1)	Work in process inventory				86,110
	Raw materials inventory					86,110
2)	work in process inventory				54,500
	Factory labor					53,000
3)	Work in process inventory				65400
	manufacturing overhead					65,400
	Account titles & Explanations				Debit	Credit
	finished goods inventory				177,670
	work in process inventory					177,670
No	Account titles & Explanations				Debit	Credit
	Accounts receivable				305200
	sales					305,200
	cost of goods sold				173,310
	finished goods inventory				173,310	173,310
finished goods inventory			102,460	Job No 51
			finished goods inventory
	opening		98,100	COGS		173,310
	WIP		177,670
	end bal		102,460
manufacturing overhead			5,450	under applied
		manufacturing overhead
	Actual		70,850	Applied		65,400
	bal		5,450