Question

Donald Transport assembles prestige manufactured homes. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $ 31 per machine-hour in 2014). The following data (in millions) show operation costs for 2014:
Materials Control, beginning balance, January 1, 2014 ...........$ 18
Work-in-Process Control, beginning balance, January 1, 2014 .......... 9
Finished Goods Control, beginning balance, January 1, 2014 ......... 10
Materials and supplies purchased on credit ................154
Direct materials used ..........................152
Indirect materials (supplies) issued to various production departments .......19
Direct manufacturing labor .........................96
Indirect manufacturing labor incurred by various production departments .....34
Depreciation on plant and manufacturing equipment ..............28
Miscellaneous manufacturing overhead incurred (ordinarily would be detailed
as repairs, utilities, etc., with a corresponding credit to various liability accounts)...13
Manufacturing overhead allocated, 3,000,000 actual machine-hours............ ?
Cost of goods manufactured .......................298
Revenues .............................410
Cost of goods sold ..........................294

Required
1. Prepare an overview diagram of Donald Transport’s job-costing system.
2. Prepare journal entries. Number your entries. Explanations for each entry may be omitted. Post to T-accounts. What is the ending balance of Work-in-Process Control?
3. Show the journal entry for disposing of under-or overallocated manufacturing overhead directly as a year-end writeoff to Cost of Goods Sold. Post the entry to T-accounts.
4. How did Donald Transport perform in 2014?



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  • CreatedMay 14, 2014
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