Lakeland Industries assembles prestige manufactured homes. Its job costing syste
ID: 2426133 • Letter: L
Question
Lakeland Industries assembles prestige manufactured homes. Its job costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $30 per machine-hour in 2009). The following data (in millions) pertain to operations for 2009:
Materials Control, beginning balance, January 1, 2009 $12
Work-In-Process Control, beginning balance, January, 1, 2009 2
Finished Goods Control, beginning balance, January 1, 2009 6
Materials and supplies purchased on credit 150
Direct materials used 145
Indirect materials (supplies) issued to various production depts. 10
Direct manufacturing labor 90
Indirect manufacturing labor incurred by various productions depts. 30
Depreciation on plant and manufacturing equipment 19
Miscellaneous manufacturing overhead incurred (ordinarily would be
Detailed as repairs, utilities, etc., with a corresponding credit to
Various liability accounts) 9
Manufacturing overhead allocated, 2,100,000 actual machine-hours ?
Cost of goods manufactured 294
Revenues 400
Cost of goods sold 292
Required
Prepare journal entries. Number your entries. Post to T-accounts. What is the ending balance of Work-In-Process Control?
Show the journal entry for disposing of under or overallocated manufacturing overhead directly as a year-end write off to Cost of Goods Sold. Post the entry to
T-accounts.
Explanation / Answer
Journal Entry Date Particulars Dr. Amt. Cr. Amt 1 Material Control Dr. 150 To Accounts payables 150 2 WIP Control Dr. 145 To Material Control 145 3 manufacturing Overhead Control Dr. 10 To Material Control 10 4 WIP Control Dr. 90 To Wages Payables Control 90 5 Manufacturing Ovehead Control Dr. 30 To Wages Payables Control 30 6 Manufacturing Ovehead Control Dr. 19 To Accumulated Dep. 19 7 Manufacturing Ovehead Control Dr. 9 To Misc. Exp. 9 9 WIP Control Dr 63 To Manufacturing Overhead Control 63 10 Finished Goods Control Dr. 294 To WIP Control 294 11 Cost of Goods Sold Dr. 292 To Finished Goods Control 292 12 Cost of Goods Sold Dr. 5 To Manufacturing Ovehead 5 13 Accounts Receivables Dr. 400 To Sales 400 Material Control Particulars Amt Particulars Amt Balance at the Beginning 12 WIP 145 Accounts Payables 150 Material Control 10 Balance at the End 7 162 162 WIP Control Particulars Amt Particulars Amt Balance at the Beginning 2 Finished Goods 294 Material Inventory 145 Wages Payables 90 Balance at the End 6 MOH 63 300 300 Finished Goods Control Particulars Amt Particulars Amt Balance at the Beginning 6 Cost of Goods Sold 292 WIP Conntrol 294 Balance at the End 8 300 300 Manufacturing Overhead Control Particulars Amt Particulars Amt Material Control 10 WIP Control 63 Wages Payable Control 30 Accumulated Dep. 19 Under Allocated MOH - COGS 5 Misc Exp. 9 (Balancing Figure) 68 68 Manufacturing Overhead Allocated to WIP = 2,100,000 Hrs X $30 = $63000000 or 63 Millions Cost of Goods Sold Particulars Amt Particulars Amt Finished Goods Control 292 Income Statement (Bal. Fig.) 297 Manufacturing Ovehead Control 5 (Goods Sold) 297 297 Actual Manufacturing Overhead = 10+30+19+9 = 68 Million Allocated MOH = 63 Millions Under Allocated MOH = 68 -63 = 5 Million
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