A carpenter company uses job-order costing. The following is a summary of factor

Question

A carpenter company uses job-order costing. The following is a summary of factory operations:

Direct materials purchased on account

$125,000

Direct materials requisitioned

$110,000

Direct labor costs incurred

$256,000

Factory Overhead costs incurred (Depreciation Expense only)

$150,000

Cost of goods completed

$515,000

Cost of goods sold

$378,000

Sales on Account

$430,000

Factory overhead applied

?

Factory overhead costs are applied at 50% of direct labor costs.

Required:

1. Prepare the required journal entries for the above transactions

2. Prepare the journal entry to dispose of the overhead variance using the immediate write-off method.

3. Is the factory overhead overapplied or underapplied?

4. What is the actual, correct amount of cost of goods sold?

Direct materials purchased on account

$125,000

Direct materials requisitioned

$110,000

Direct labor costs incurred

$256,000

Factory Overhead costs incurred (Depreciation Expense only)

$150,000

Cost of goods completed

$515,000

Cost of goods sold

$378,000

Sales on Account

$430,000

Factory overhead applied

?

Explanation / Answer

Ans) A carpenter company uses job-order costing Sales $      430,000.00 Direct Material Purchase $      125,000.00 Direct Material Requsitioned $      110,000.00 Direct Labour $      256,000.00 Factory Overhead $      150,000.00 Cost of goods completed $      515,000.00 Cost of goods sold $      278,000.00 Factory Overhead cost applied $      128,000.00 1 Journal Entries Particular Amount (DR) Amount(CR) Direct Material $      125,000.00    Accounts Payable $          125,000.00 Work in Process $      110,000.00    Direct Material $          110,000.00 Direct Labour $      256,000.00      Cash $          256,000.00 Work in Process $      256,000.00    Direct Labour $          256,000.00 Depreciation $      150,000.00     Accumulated Depreciation $          150,000.00 Work in Process $      128,000.00    Manufacturing Overhead $          128,000.00 Finished Goods $      494,000.00    Work in process $          494,000.00 Cost of goods sold $      494,000.00 Finished Goods $          494,000.00 2 cost of goods sold $        22,000.00     Manufacturing overhead $             22,000.00 3 Manufacturing Overhead under applied $        22,000.00 4 Actual amount of cost of goods sold $      516,000.00

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.