Ca nfield Construction applies overhead to its projects at a rate of $65 per dir
ID: 2375828 • Letter: C
Question
Canfield Construction applies overhead to its projects at a rate of $65 per direct labor hour. Laborers are paid an average rate of $30 per hour. The Jefferson Apartments project was charged a total of $1,200,000 in direct materials and $450,000 in direct labor costs.
a. Overhead applied to the Jefferson Apartments project amounted to:
b. The journal entry to transfer the completed Jefferson Apartments project to Canfield's finished goods inventory would include:
c. The journal entry made by Canfield to record the sale of the Jefferson Apartments project to King Development Company for $5,250,000 would include:
Please show ALL WORK if any for all answers.
Explanation / Answer
a. Overhead applied to the Jefferson Apartments project amounted to:
$450,000/30 = 15,000 hours x $65 = $975,000
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$1,200,000 + $450,000 + $975,000 = $2,625,000
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$2,625,000