Strater manufacturing uses job order cost accounting system. On October 1, the c
ID: 2367711 • Letter: S
Question
Strater manufacturing uses job order cost accounting system. On October 1, the company has a balance in work in process inventory of $5,500 and two jobs in process: Job No. 429, $8000 and job no 430, $3500. During October, a summary of source documents reveals the following: During October, a summary of source documents reveals the following: For Materials Requisition Slips Labor Time Tickets Job No. 429 $5,500 $ 4,600 Job No. 430 2,600 2,000 Job No. 431 3,400 4,200 Job No. 432 4,000 2,000 General Use 950 1,000 Strater Manufacturing applies manufacturing overhead to jobs at an overhead rate of 70% of direct labor cost. Job No. 429 is completed during the month. Instructions 1. Prepare summary journal entries to record the requisition slips, time tickets, the assignment of manufacturing overhead to jobs, and the completion of Job No. 429. Show computations. 2. What is the balance in Work in Process Inventory at October 31? 3. If Strater Manufacturing incurred $8,000 of manufacturing overhead in addition to indirect materials and indirect labor, was overhead over or underapplied in October and how much?Explanation / Answer
Hi, Please find the journal entries as follows: Work in Process Inventory Dr. (5500+2600+3400+4000) 15500 Manufacturing Overhead Dr. 950 Raw Materials Inventory Cr. 16450 Work in Process Inventory Dr. (4600+2000+4200+2000) 12800 Manufacturing Overhead Dr. 1000 Factory Labor Cr. 13800 Work in Process Inventory Dr. (12800*.70) 8960 Manufacturing Overhead Cr. 8960 Finished Goods Inventory Dr. (2000+5500+4600+.70*4600) 15320 Work in Process Inventory Cr. 15320 Part B: Balance WIP = 5500+15500+12800+8960 -15320 = 27440 Part C: Manufacturing Overhead Applied = 7010 Actual Overhead Incurred = 8000 Under Applied By = 990 Thanks.