The Houston Company uses a job order cost system. The following relate to the year of 20X4:

3. Factory overhead is applied to production on the basis of \(\$ 2\) per direct labor hour.
4. Total factory overhead incurred was \(\$ 24,000\).
5. Jobs No. 101 and No. 102 were completed during the year.
6. Job No. 101 was sold for \(\$ 7,500\).
{Required:}

a. Prepare the journal entries required to record the above information. (Allocate any over- or underapplied overhead to work-in-process, finished goods, and cost of goods sold based on their total overhead applied.

b. Determine the beginning inventory of work-in-process at January 1, \(20 \mathrm{X} 5\).

Transcribed Image Text:

1. Raw materials issued to production: Job No. 101 Job No.102......... Job No. 103. 2. Direct labor incurred: $2,000 5,000 ******......... 6,000 .$1,500 4,000 3,600 Job No. 101...........1,000 hours........ Job No. 102.......... 2,000 hours Job No. 103 3,000 hours