Problem 15-1A Problem 15-1A Job No. Direct Materials Direct Labor Job No. 50 Dat
ID: 2470191 • Letter: P
Question
Problem 15-1A
Problem 15-1A
Job No.
Direct Materials
Direct Labor
Job No. 50
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Job No. 51
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Job No. 52
Date
D irect Materials
Direct Labo r
Manufacturing Overhead
No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
Account Titles and Explanation
Debit
Credit
No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
Problem 15-1A
Degelman Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2014, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account.During the month of January, Deglman Manufacturing began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month.
1. Purchased additional raw materials of $90,000 on account. 2. Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $20,000; depreciation expense on equipment $19,000; and various other manufacturing overhead costs on account $16,000. 4. Assigned direct materials and direct labor to jobs as follows.
Job No.
Direct Materials
Direct Labor
50 $10,000 $5,000 51 39,000 25,000 52 30,000 20,000Explanation / Answer
Since, there are multiple parts to the question, the first four have been answered.
___________
Part 1)
The predetermined overhead rate is calculated as follows:
Predetermined Overhead Rate = Total Estimated Manufacturing Overhead/Estimated Direct Labor Cost*100
________
Using the values provided in the question, we get,
Predetermined Overhead Rate = 980,000/700,000*100 = 140%
___________
Part 2)
a)
_________
_________
_________
Part 3)
The journal entries are as follows:
_________
Part 3)
The journal entries are as follows:
Job No. 50 Date Direct Materials Direct Labor Manufacturing Overhead Beg. 20,000 12,000 16,000 Jan. 10,000 5,000 7,000 (5,000*140%) $30,000 $17,000 $23,000 Cost of completed job Direct materials 30,000 Direct labor 17,000 Manufacturing overhead 23,000 Total cost $70,000