Dash Industries Inc. manufactures recreational vehicles. Dash uses a job order c
ID: 2469307 • Letter: D
Question
Dash Industries Inc. manufactures recreational vehicles. Dash uses a job order cost system. The time tickets from April jobs are summarized as follows: Job 201 $5,250 Job 202 6,100 Job 203 4,280 Job 204 5,620 Factory supervision 2,785 Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $25 per direct labor hour. The direct labor rate is $50 per hour.
Required:
A. Journalize the April 30 entry to record the factory labor costs.
B. Journalize a second entry on April 30 to apply factory overhead to production for April.
*Refer to the Chart of Accounts provided for the correct wording of account titles.
CHART OF ACCOUNTS
Dash Industries Inc.
General Ledger
ASSETS
110
Cash
121
Accounts Receivable
125
Notes Receivable
126
Interest Receivable
131
Materials
132
Work in Process
133
Factory Overhead
134
Finished Goods
141
Supplies
142
Prepaid Insurance
143
Prepaid Expenses
181
Land
191
Factory
192
Accumulated Depreciation-Factory
LIABILITIES
210
Accounts Payable
221
Utilities Payable
231
Notes Payable
236
Interest Payable
241
Lease Payable
251
Wages Payable
252
Consultant Fees Payable
Required:
A.
Journalize the April 30 entry to record the factory labor costs.
B.
Journalize a second entry on April 30 to apply factory overhead to production for April.
*Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
EQUITY
311
Common Stock
340
Retained Earnings
351
Dividends
390
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Goods Sold
520
Wages Expense
531
Selling Expenses
532
Insurance Expense
533
Utilities Expense
534
Office Supplies Expense
540
Administrative Expenses
560
Depreciation Expense-Factory
590
Miscellaneous Expense
710
Interest Expense
CHART OF ACCOUNTS
Dash Industries Inc.
General Ledger
ASSETS
110
Cash
121
Accounts Receivable
125
Notes Receivable
126
Interest Receivable
131
Materials
132
Work in Process
133
Factory Overhead
134
Finished Goods
141
Supplies
142
Prepaid Insurance
143
Prepaid Expenses
181
Land
191
Factory
192
Accumulated Depreciation-Factory
LIABILITIES
210
Accounts Payable
221
Utilities Payable
231
Notes Payable
236
Interest Payable
241
Lease Payable
251
Wages Payable
252
Consultant Fees Payable
Required:
A.
Journalize the April 30 entry to record the factory labor costs.
B.
Journalize a second entry on April 30 to apply factory overhead to production for April.
*Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
EQUITY
311
Common Stock
340
Retained Earnings
351
Dividends
390
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Goods Sold
520
Wages Expense
531
Selling Expenses
532
Insurance Expense
533
Utilities Expense
534
Office Supplies Expense
540
Administrative Expenses
560
Depreciation Expense-Factory
590
Miscellaneous Expense
710
Interest Expense
Explanation / Answer
A.
Total labor cost for Jobs = $5,250 + $6,100 + $4,280 + $5,620 = $21,250
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
Apr-30
Work in process
$21,250
Factory Overhead
$2,785
Wages payable
$24,035
B.
Direct labor rate = $50 per hour
Total labor hours = Total labor costs / Direct labor rate = $21,250/$50 = 425 labor hours
Factory overhead applied = Direct labor hours * Predetermined overhead rate = 425 hours * $25 = $10,625
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
Apr-30
Work in process
$10,625.00
Factory Overhead
$10,625.00
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
Apr-30
Work in process
$21,250
Factory Overhead
$2,785
Wages payable
$24,035
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