Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw
Question:
Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw materials purchases, (b) direct materials usage, (c) indirect materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (f) payment of factory payroll, (g) other overhead costs, (h) overhead applied, (i) goods transferred from production to finished goods, and (j) sale of finished goods
Sierra Company manufactures woven blankets and accounts for product costs using process costing. The company uses a single processing department The following information is available regarding its May inventories
The following additional information describes the company's production activities for May.
Raw materials purchases (on credit)..............................$290.000
Factory payroll cost (paid in cash)................................1,563,000
Other overhead cost (Other Accounts credited.....................48,000
Materials used
Direct......................................................................................$196,500
Indirect........................................................................................66,000
Labor used
Direct..................................................................$780,000
Indirect.................................................................783,000
Overhead rate as a percent of direct labor ...........................115%
Sales (on credit)..................................................................$4,500,000
The predetermined overhead rate was computed at the beginning of the year as 115% of direct labor cost.
2. Prepare summary journal entries dated May 31 to record the following production activities during May: (a) raw materials purchased. (b) direct materials usage, (C) direct materials usage, (d) direct labor costs incurred, (e) indirect labor costs incurred, (1) payment of factory payrol. (g) other overhead costs. (h) Overhead applied. (I) goods transferred from production to finished goods, and (j) sale of finished goods.
Step by Step Answer:
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta