Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2425090 • Letter: S
Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
A) Assume the ending raw materials inventory is $1,000 and the company does not use any indirect materials. Prepare the journal entries to record raw materials purchases and the issuance of direct materials for use in production.
B) Assume that the company does not use any indirect labor. Prepare the journal entry to record the direct labor costs added to production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
C) Prepare the journal entry to apply manufacturing overhead costs to production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
D) Prepare the journal entry to transfer costs from Work in Process to Finished Goods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
E) Prepare a completed Work in Process T-account including the beginning and ending balances and all debits and credits posted to the account.
F) Prepare a schedule of cost of goods sold.
G) Prepare the journal entry to transfer costs from Finished Goods to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
H) What is the amount of underapplied or overapplied overhead?
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
Estimated total fixed manufacturing overhead 10,000 Estimated variable manufacturing overhead per direct labor-hour 1.00 Estimated total direct labor-hours to be worked 2000 Total actual manufacturing overhead costs incurred 12,500 Job P Job Q Direct Materials 13,000 8,000 Direct Labor Cost 21,000 7,500 Actual direct labor-hours worked 1,400 500A) Assume the ending raw materials inventory is $1,000 and the company does not use any indirect materials. Prepare the journal entries to record raw materials purchases and the issuance of direct materials for use in production.
B) Assume that the company does not use any indirect labor. Prepare the journal entry to record the direct labor costs added to production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
C) Prepare the journal entry to apply manufacturing overhead costs to production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
D) Prepare the journal entry to transfer costs from Work in Process to Finished Goods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
E) Prepare a completed Work in Process T-account including the beginning and ending balances and all debits and credits posted to the account.
F) Prepare a schedule of cost of goods sold.
G) Prepare the journal entry to transfer costs from Finished Goods to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
H) What is the amount of underapplied or overapplied overhead?
Explanation / Answer
E) T- Account
Work in process inventory
F) Schedule of cost of goods sold
Raw materials used 21,000
Direct labor 28,500
Manufacturing overhead 12,000
total manufacturing cost 61,500
less:Closing WIP 19,100
cost of goods sold $42,400
Journal entry
H) underapplied overhead = 12,500 - $12,000 = $500
A Raw materials inventory $22,000 To Accounts payable/ Cash $22,000 WIP inventory $21,000 To Raw materials inventory $21,000 (13,000+8,000)Related Questions
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