Watson Manufacturing Company employs a job cost accounting system and maintains perpetual inventory records. The following transactions
Question:
Watson Manufacturing Company employs a job cost accounting system and maintains perpetual inventory records. The following transactions occurred in the first month of operations:
1). Direct materials requisitioned during the month:
Job 101 $25,000
Work 102 23,000
Work 103 24,000
Total $72,000
2). Direct labor incurred and charged to jobs during the month was:
Job 101 $33,000
Work 102 36,000
Work 103 27,000
Total $96,000
3). Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 70% of direct labor costs.
4). Actual manufacturing overhead costs incurred during the month were $76,000.
5). Job 101 consisting of 1000 units and job 103 consisting of 200 units were completed during the month.
Instructions:
- (a) Prepare journal entries to record past transactions.
- (b) Answer the following questions:
1. How much manufacturing overhead was applied to job 103 during the month?
2. Calculate the unit cost of jobs 101 and 103.
3. What is the balance in the Work in Process Inventory at the end of the month?
4. Determine if manufacturing overhead costs were applied in excess or excess during the month. How much does it cost?
Cost Accounting A Managerial Emphasis
ISBN: 978-0136126638
13th Edition
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav