Foley Company uses a job-order costing system. The following data relate to the
ID: 2371806 • Letter: F
Question
Foley Company uses a job-order costing system. The following data relate to the month of october, the first month of the company’s fiscal year:
The company applies manufacturing overhead cost to production on the basis of $4 per machine-hour. A total of 76,300 machine-hours were recorded for october.
Production orders costing $510,000 according to their job cost sheets were completed during october and transferred to finished goods.
Production orders that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 50% above cost.
What I need help with...
1. Preparing journal entries to record the above information.
2. Prepare t-accounts for manufacturing overhead and work in process. Compute the ending balance in each account, assuming that work in process has a beginning balance of 34,000.
The company applies manufacturing overhead cost to production on the basis of $4 per machine-hour. A total of 76,300 machine-hours were recorded for october.
g.Production orders costing $510,000 according to their job cost sheets were completed during october and transferred to finished goods.
h.Production orders that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 50% above cost.
What I need help with...
1. Preparing journal entries to record the above information.
2. Prepare t-accounts for manufacturing overhead and work in process. Compute the ending balance in each account, assuming that work in process has a beginning balance of 34,000.
Explanation / Answer
Foley Company uses a job-order costing system. The following data relate to the month of october, the first month of the company’s fiscal year:
a. Raw materials purchased on account, $210,000.
b. Raw materials issued to production, $190,000 (80% direct and 20% indirect).
c. Direct labor cost incurred, $49,000; and indirect labor cost incurred, $21,000.
d. Depreciation recorded on factory equipment, $105,000.
e. Other manufacturing overhead costs incurred during october, $130,000 (credit accounts payable).
f.
The company applies manufacturing overhead cost to production on the basis of $4 per machine-hour. A total of 75,000 machine-hours were recorded for october.
g.
Production orders costing $510,000 according to their job cost sheets were completed during october and transferred to finished goods.
h.
Production orders that had cost $450,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 50% above cost.
similar problem will help you in solving your problem....
Answer...
a. Raw Materials Inventory 210,000
Accounts Payable 210,000
b. Work in Process 178,000
Manufacturing Overhead 12,000
Raw Materials Inventory 190,000
c. Work in Process 21,000
Manufacturing Overhead 49,000
Salaries and Wages Payable 70,000
d. Manufacturing Overhead 105,000
Accumulated Depreciation 105,000
e. Manufacturing Overhead 130,000
Accounts Payable 130,000
f. Work in Process 300,000
Manufacturing Overhead 300,000
75,000 MH × $4 per MH = $300,000.
g. Finished Goods 510,000
Work in Process 510,000
h. Cost of Goods Sold 450,000
Finished Goods 450,000
Accounts Receivable 675,000
Sales 675,000
$450,000 × 1.50 = $675,000.