The Polaris Company uses a job-order costing system. The following data relate to October, the first month

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The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company’s fiscal year.

a. Raw materials purchased on account, $210,000.

b. Raw materials issued to production, $190,000 ($178,000 direct materials and $12,000 indirect materials).

c. Direct labor cost incurred, $90,000; indirect labor cost incurred, $110,000.

d. Depreciation recorded on factory equipment, $40,000.

e. Other manufacturing overhead costs incurred during October, $70,000 (credit Accounts Payable).

f. The company applies manufacturing overhead cost to production on the basis of $8 per machine-hour. A total of 30,000 machine-hours were recorded for October.

g. Production orders costing $520,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

h. Production orders that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 25% above cost.

Required:

1. Prepare journal entries to record the information given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that

Work in Process has a beginning balance of $42,000.

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Related Book For  answer-question

Managerial Accounting

ISBN: 978-0697789938

13th Edition

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

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