The company uses a perpetual inventory system and has a highly labour-intensive production process, so it assigns manufacturing overhead based on direct labour cost. The predetermined overhead rate was computed from the following data:

Total estimated factory overhead $2,400,000

Total estimated direct labour cost $2,000,000

The WIP account given below relates to the activities  for the month of June:

WIP Inventory A/C

June 1             Balance b/f $15,000

Direct Materials Used 123,000

Additional data:

▪ Total material requisitioned ………………………………… $153,000

▪ Manufacturing Labour Costs incurred …………………. $163,500 (75% represents direct labour)

▪ Other manufacturing overheads incurred …………... $94,275

▪ Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold on account at a margin of 33 1/3% on sales.

State the journal entries necessary to record the following transactions in the general journal.

(i) Total materials issued to production

(ii) Manufacturing labour incurred

(iii) Assign manufacturing labour to the appropriate accounts

(iv) Other manufacturing overhead incurred

(v) Manufacturing overhead applied to production

(vi) Move completed jobs to finished goods

(vii) Account for jobs completed and sold

 

Answer rating: 100% (QA)

Sno Particulars Debit Credit Work In process Inventory 123000 Manuf... View the full answer