Question

Production Company produces gadgets for the coveted small appliance market. The following data reflect activity for the most recent year, 2012:
Costs incurred
Purchases of direct materials (net) on account ..... $124,000
Direct manufacturing labour cost ........... 80,000
Indirect labour ................... 54,500
Amortization, factory equipment .......... 30,000
Amortization, office equipment .......... 7,000
Maintenance, factory equipment .......... 20,000
Miscellaneous factory overhead .......... 9,500
Rent, factory building ................ 70,000
Advertising expense ............... 90,000
Sales commissions ............... 30,000
Beginning and ending inventories for the year were as follows:
Production Company uses a normal job-costing system and allocates overhead to work-in-process at a rate of $2.50 per direct manufacturing labour dollar. Indirect materials are insignificant, so there is no inventory account for indirect materials.
REQUIRED
1. Prepare journal entries to record the 2012 transactions including an entry to close out over-allocated or underallocated overhead to cost of goods sold. For each journal entry, indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry.
2. Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, Manufacturing Overhead Control, and Manufacturing Overhead Allocated accounts.


$1.99
Sales3
Views77
Comments0
  • CreatedJuly 31, 2015
  • Files Included
Post your question
5000