Vacation Homes manufactures prefabricated chalets in Utah. The com- pany uses a job order costing system...
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Vacation Homes manufactures prefabricated chalets in Utah. The com- pany uses a job order costing system in which each chalet is a job. The following events occurred during May. a. Purchased materials on account, $405,000. b. Incurred manufacturing wages of $112,000. Requisitioned direct materials and used direct labor in manufacturing: Direct Materials $41,000 56,000 62,000 66,000 Chalet 20 Chalet 21 Chalet 22 Chalet 23 c. Depreciation of manufacturing equipment, $20,000. d. Other overhead costs incurred on chalets 20 through 23: Indirect labor.............. Equipment rentals paid in cash.. Plant insurance expired............... Direct Labor $15,000 29,000 19,000 21,000 f. Chalets completed: 20, 22, and 23. g. Chalets sold: 20 for $99,000; 23 for $141,900. $28,000 10,400 6,000 c. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost. Requirements 1. Record the preceding events in the general journal. (p. 966) 2. Open T-accounts for Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assum- ing that the beginning balances were zero. (pp. 947-948) 3. Add the costs of the unfinished chalet, and show that this equals the ending balance in Work in Process Inventory. (p. 958) 4. Add the cost of the completed chalet that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. (p. 956) 5. Compute the gross profit on each chalet that was sold. What costs must the gross profit cover for Vacation Homes? Vacation Homes manufactures prefabricated chalets in Utah. The com- pany uses a job order costing system in which each chalet is a job. The following events occurred during May. a. Purchased materials on account, $405,000. b. Incurred manufacturing wages of $112,000. Requisitioned direct materials and used direct labor in manufacturing: Direct Materials $41,000 56,000 62,000 66,000 Chalet 20 Chalet 21 Chalet 22 Chalet 23 c. Depreciation of manufacturing equipment, $20,000. d. Other overhead costs incurred on chalets 20 through 23: Indirect labor.............. Equipment rentals paid in cash.. Plant insurance expired............... Direct Labor $15,000 29,000 19,000 21,000 f. Chalets completed: 20, 22, and 23. g. Chalets sold: 20 for $99,000; 23 for $141,900. $28,000 10,400 6,000 c. Allocated overhead to jobs at the predetermined rate of 60% of direct labor cost. Requirements 1. Record the preceding events in the general journal. (p. 966) 2. Open T-accounts for Work in Process Inventory and Finished Goods Inventory. Post the appropriate entries to these accounts, identifying each entry by letter. Determine the ending account balances, assum- ing that the beginning balances were zero. (pp. 947-948) 3. Add the costs of the unfinished chalet, and show that this equals the ending balance in Work in Process Inventory. (p. 958) 4. Add the cost of the completed chalet that has not yet been sold, and show that this equals the ending balance in Finished Goods Inventory. (p. 956) 5. Compute the gross profit on each chalet that was sold. What costs must the gross profit cover for Vacation Homes?
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1 Journal Entries Date Description Debit Credit a Direct Materials 405000 Accounts Payble 405000 To ... View the full answer
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