Track the flow of costs in a job costing system and ledger entries. Gordon Bros Ltd manufactures
Question:
Track the flow of costs in a job costing system and ledger entries. Gordon Bros Ltd manufactures
plastic products. The following details relate to Job #369:
April 1, 2020: Direct materials of $420,000 and indirect materials of $17,000 were purchased. However, the
company used direct materials costing $355,000
April 2, 2020: Indirect labor costs of $28,000 and direct labor costs of $169,000 were incurred
In addition to the indirect materials and indirect labor, Gordon Bros Ltd incurred the overheads costs on
April 4, 2020:
■■ Factory insurance, $10,000
■■ Factory maintenance, $7,000
■■ Factory cleaning, $6,000
■■ Depreciation of equipment, $5,000
However, only $60,000 of the overhead costs was allocated to Job #369.
1. Compute the total manufacturing overhead costs for Job #369.
2. Prepare the relevant ledger entries to allocate manufacturing overhead cost to work in process inventory.