Chesapeake Sailmakers uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appeal’s in the company’s Work in Process Inventory account for the month of June:
Debits to account: | |
Balance June 1 | $7,200 |
Direct materials | 12,000 |
Direct labor | 9,000 |
Manufacturing overhead (applied to jobs as 150% of direct labor cost) | 13,500 |
Total debits to account | $41,700 |
Credits to account: | |
Transferred to Finished Goods Inventory account | 33,200 |
Balance, June 30 | $8,500 |
| |
Instructions
a. Assuming that the direct labor charged to the jobs still in process at lime 30 amounts to $2,100, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30.
b. Prepare general journal entries to summarize:
1. The manufacturing costs (direct materials, direct labor, and overhead I charged to production during June.
2.The transfer of production completed during June lo the Finished Goods Inventory account.
3. The cash sale of 90 percent (if the merchandise completed during June at a total sales price of $46,500. Show the related cost of goods sold in a separate journal entry.
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