Southworth Company uses a job-order costing system and applies manufacturing ove
ID: 2352797 • Letter: S
Question
Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $251,200 of manufacturing overhead for an estimated allocation base of $157,000 direct material dollars.The following transactions took place during the year (all purchases and services were acquired on account):
a. Raw materials purchased, $146,000.
b. Raw materials requisitioned for use in production (all direct materials), $147,000.
c. Utility bills incurred in the factory, $23,000.
d. Costs for salaries and wages were incurred as follows:
Direct labor $ 215,000
Indirect labor $ 107,800
Selling and administrative salaries $ 143,000
e. Maintenance costs incurred in the factory, $21,000.
f. Advertising costs incurred, $124,000.
g.
Depreciation recorded for the year, $46,000 (70% relates to factory assets, and the remainder relates to selling and administrative assets).
h.
Rental cost incurred on buildings, $80,000 (70% of the space is occupied by the factory, and 30% is occupied by sales and administration).
i. Miscellaneous selling and administrative costs incurred, $12,000.
j. Manufacturing overhead cost was applied to jobs, $ ?
k.
Cost of goods manufactured for the year, $552,000.
l.
Sales for the year (all on account) totaled $1,400,000. These goods cost $520,000 according to their job cost sheets.
The balances in the inventory accounts at the beginning of the year were as follows:
Raw materials $ 22,000
Work in process $ 27,000
Finished Goods $ 31,000
2.
Post your entries to T-accounts. (Don
Explanation / Answer
a.
Raw Materials Inventory
146,000
Accounts Payable
146,000
To record purchase of direct materials
b.
Work In Process Inventory, Job #????
147,000
Raw Materials Inventory
147,000
To record materials requisitions
c.
Manufacturing Overhead
23,000
Accounts Payable
23,000
To record factory utilities
d.
Work-in-Process Inventory, Jobs #????
215,000
Manufacturing Overhead
90,000
Selling and Administrative Salaries Expense
1,433
Wages and Salaries Payable
306,433
To record payroll
e.
Manufacturing Overhead
21,000
Accounts Payable
21,000
To record factory maintenance
f.
Advertising Expense
124,000
Accounts Payable
124,000
To record advertising expense incurred
g.
Manufacturing Overhead
45,000
Depreciation Expense, Selling & Administrative
5,000
Accumulated Depreciation, Selling & Administrative
5,000
Accumulated Depreciation, Factory
45,000
To record depreciation
h.
Manufacturing Overhead
80,000
Rental Expense
12,000
Accounts Payable
92,000
To record cost of rent
i.
Misc. Selling and Administrative Expense
17,000
Accounts Payable
17,000
To record misc. selling & administrative expense
j.
Work In Process Inventory, Job #????
240,000
Manufacturing Overhead
240,000
To record the application of MOH
k.
Finished Goods Inventory
522,000
Work In Process Inventory, Job #????
522,000
To record completed goods transferred to FG
l.
Accounts Receivable, Name???
1400000
Sales
1,400,000
To record sales on account
Cost of Goods Sold
520,000
Finished Goods
520,000
To record cost of goods sold
Overhead account to COGS.
m.
Cost of Goods Sold
19,000
Manufacturing Overhead
19,000
To close the Manufacturing Overhead Account
a.
Raw Materials Inventory
146,000
Accounts Payable
146,000
To record purchase of direct materials
b.
Work In Process Inventory, Job #????
147,000
Raw Materials Inventory
147,000
To record materials requisitions
c.
Manufacturing Overhead
23,000
Accounts Payable
23,000
To record factory utilities
d.
Work-in-Process Inventory, Jobs #????
215,000
Manufacturing Overhead
90,000
Selling and Administrative Salaries Expense
1,433
Wages and Salaries Payable
306,433
To record payroll
e.
Manufacturing Overhead
21,000
Accounts Payable
21,000
To record factory maintenance
f.
Advertising Expense
124,000
Accounts Payable
124,000
To record advertising expense incurred
g.
Manufacturing Overhead
45,000
Depreciation Expense, Selling & Administrative
5,000
Accumulated Depreciation, Selling & Administrative
5,000
Accumulated Depreciation, Factory
45,000
To record depreciation
h.
Manufacturing Overhead
80,000
Rental Expense
12,000
Accounts Payable
92,000
To record cost of rent
i.
Misc. Selling and Administrative Expense
17,000
Accounts Payable
17,000
To record misc. selling & administrative expense
j.
Work In Process Inventory, Job #????
240,000
Manufacturing Overhead
240,000
To record the application of MOH
k.
Finished Goods Inventory
522,000
Work In Process Inventory, Job #????
522,000
To record completed goods transferred to FG
l.
Accounts Receivable, Name???
1400000
Sales
1,400,000
To record sales on account
Cost of Goods Sold
520,000
Finished Goods
520,000
To record cost of goods sold
Overhead account to COGS.
m.
Cost of Goods Sold
19,000
Manufacturing Overhead
19,000
To close the Manufacturing Overhead Account
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