April 30 May 31 Inventories Raw materials $27,000 $41,000 Goods in process 9,000

Question

April 30 May 31
Inventories
Raw materials $27,000 $41,000
Goods in process 9,000 20,600
Finished goods 70,000 33,000
Activities and information for May
Raw materials purchases (paid with cash) 183,000
Factory payroll (paid with cash) 500,000
Factory overhead
Indirect materials 6,000
Indirect labor 74,000
Other overhead costs 95,500
Sales (received in cash) 1,500,000
Predetermined overhead rate based on direct labor cost 55

Need journal entries for...
1.) Direct materials usage
2.)Direct labor usage
3.)Factory overhead excluding indirect materials and indirect labor
4.) Application of overhead to goods in process
5.) Transfer of finished jobs to the finished goods inventory
6.) sale and delivery of finished goods to customers for cash (record unadjusted cost os sales)
7.) allocation (closing) of overapplied or underapplied overhead to cost of goods sold

Explanation / Answer

Direct Material Usage Beginning Inventory 27,000.00 Add: Purchases 183,000.00 Less: Closing Inventory (41,000.00) Direct Material Usage 169,000.00 Work in Process 169,000.00 Raw Material Usage 169,000.00 Work in Process 500,000.00 Direct Labor Usage 500,000.00 Work in Process 275,000.00 Factory Overhead 275,000.00 (To record the WIP using the pre determined overhead rate of 55% of Direct labor cost ) Finished Goods Inventory 1,027,900.00 Work in Process 1,027,900.00 Cash 1,500,000.00 Sales Revenue 1,500,000.00 Factory Overhead 99,500.00 Cost of Goods sold 99,500.00 (To record the over applied OH charged to Cost of Goods sold ) Over Heads applied - 275,000 Actual OH                     - 175,500 Over Heads applied - 99,500 Factory Overhead 175500         Cash 175500

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