Job No. Direct Materials Direct Labor Warning Don\'t show me this message again
ID: 2517730 • Letter: J
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Job No.
Direct Materials
Direct Labor
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Job No. 50
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Job No. 51
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Job No. 52
Date
Direct Materials
Direct Labor
Manufacturing Overhead
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No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
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No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
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Account Titles and Explanation
Debit
Credit
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No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
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Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 20,000 , direct labor $ 12,000 , and manufacturing overhead $ 16,000 . As of January 1, Job No. 49 had been completed at a cost of $ 90,000 and was part of finished goods inventory. There was a $ 15,000 balance in the Raw Materials Inventory account.During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $ 122,000 and $ 158,000 , respectively. The following additional events occurred during the month.
1. Purchased additional raw materials of $ 90,000 on account. 2. Incurred factory labor costs of $ 70,000 . Of this amount $ 16,000 related to employer payroll taxes. 3. Incurred manufacturing overhead costs as follows: indirect materials $ 17,000 ; indirect labor $ 20,000 ; depreciation expense on equipment $ 12,000 ; and various other manufacturing overhead costs on account $ 16,000 . 4. Assigned direct materials and direct labor to jobs as follows.
Job No.
Direct Materials
Direct Labor
50 $ 10,000 $ 5,000 51 39,000 25,000 52 30,000 20,000Warning
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Explanation / Answer
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(a) 840000 Overhead Cost/700000 Direct Labor cost 120% of Direct Labor (b) Job No 50 Date Direct Material Direct Labor Manufacturing Overhead (5000*120% for Jan) Beginning 20000 12000 16000 January 10000 5000 6000 30000 17000 22000 Cost of Completed Job: Direct Material 30000 Direct Labor 17000 Manufacturing Overhead 22000 Total Cost 69000 Job No 51 Date Direct Material Direct Labor Manufacturing Overhead (25000*120% for Jan) Beginning January 39000 25000 30000 39000 25000 30000 Cost of Completed Job: Direct Material 39000 Direct Labor 25000 Manufacturing Overhead 30000 Total Cost 94000 Job No 52 Date Direct Material Direct Labor Manufacturing Overhead (20000*120% for Jan) Beginning January 30000 20000 24000 30000 20000 24000 (c) Journal Entries: Account Debit Credit Raw Material Inventory 90000 Accounts Payable 90000 Factory Labor 70000 Factory wages payable 54000 Employer taxes payable 16000 Manufacturing Overhead 65000 Accounts Payable 16000 Accumulated Dep 12000 Raw Material Inventory 17000 Factory Labor 20000 (d) Journal Entries: Account Debit Credit Work in Process Inventory 79000 Raw Material Inventory 79000 (10000+39000+30000) Work in Process Inventory 50000 Factory Labor 50000 (5000+25000+20000) Work in Process Inventory 60000 Manufacturing overhead 60000 (50000*120%) (e) Journal Entries: Finished Goods Inventory 163000 Work in Process Inventory 163000 (69000+94000) From Part b (f) Account Debit Credit Accounts Receivable 280000 Sales 280000 (122000+158000) Cost of goods sold 159000 Finished Goods Inventory 159000 (Job 49 90000+ Job 50 69000) (g) Balance in Finished Goods invetnory Beginning Balance 90000 Given add: Cost of completed job 163000 (50 and 51) less: cost of job Sold -159000 (49 and 50) Ending Balance 94000 (h) Actual Manufacturing OVH 65000 given Applied OVH 60000 Job: 50 6000 Job: 51 30000 Job: 52 24000 Hence Overapplied Balance 5000Related Questions
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