Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order cos
ID: 2413756 • Letter: Q
Question
Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order costing system and applies overhead to jobs on the basis of direct labor-hours. For the current year, Quark estimated that it would work 111,000 direct labor-hours and incur $32,079,000 of manufacturing overhead cost. The following summarized information relates to January of the current year. The raw materials purchased include both direct and indirect materials. Raw materials purchased on account Direct materials requisitioned into production $2,084,900 Indirect materials requisitioned into production S 158,200 Direct labor cost (12,700 hours@ $32 per hour) S 406.400 Indirect labor cost (13.200 hours $23 per hour) S 303,600 Depreciation on the factory building Depreciation on the factory equipment Utilities for the factory Cost of jobs finished Cost of jobs sold Sales (all on account) $2,264,400 S 354,200 $ 1,656,000 S 149,000 $ 4,669,600 $ 4,456,500 $ 6,685,600 ReguiredExplanation / Answer
Solution: No. General Journal Debit Credit a. Raw Materials 2,264,400 Accounts Payable 2,264,400 b. Work in Process 2,084,900 Raw Materials 2,084,900 c. Manufacturing Overhead 158,200 Raw Materials 158,200 d. Work in Process 406,400 Salaries and Wages Payable (or Cash) 406,400 e. Manufacturing Overhead 303,600 Salaries and Wages Payable (or Cash) 303,600 f. Work in Process 3,670,300 Manufacturing Overhead 3,670,300 Notes: [manufacturing OH applied on the basis of direct labor hours] =(total manufacturing OH/Total direct labor hours) x direct labor hours =($32,079,000/111,000) x 12,700 =3,670,300 g. Manufacturing Overhead 2,159,200 Accumulated Depreciation, Building 354,200 Accumulated Depreciation, Equipment 1,656,000 Utilities Payable (or Cash) 149,000 Notes: Manufacturing Overhead = 354,200+1,656,000 +149,000 = 2,159,200 h. Finished Goods 4,669,600 Work in Process 4,669,600 i. Cost of Goods Sold 4,456,500 Finished Goods 4,456,500 j. Accounts Receivable 6,685,600 Sales 6,685,600 Please feel free to ask if anything about above solution in comment section of the question.