Old School Publishing Inc. began printing operations on January 1. Jobs 301 and

Question

Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,000 of indirect materials and $11,200 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: Job 302 Job 301 Direct materials $10,200 Direct materials $21,000 Direct labor 8,000 Direct labor 15,400 Factory overhead 6,080 Factory overhead 11,704 Total 24,280 $48,104

Explanation / Answer

overhead rate = overhead/Direct labor cost 6,080/8,000 76.00% job301 job 302 job 303 job 304 Direct materials 10200 21,000 23,000 14,200 68400 Direct labor 8000 15400 18000 12200 53600 Factory overhead 6080 11704 13680 9272 40736 total 24280 48,104 54,680 35,672 162736 Journal Entries Account titles & Explanations Debit Credit a) Work in process inventory 68,400 Factory overhead 7,000 Raw materials inventory 75,400 b) Work in process inventory 53,600 Factory overhead 11,200 Factory wages payable 64,800 c) Work in process inventory 40736 Factory overhead 40736 d) Finished goods inventpry 72384 Work in process inventory 72,384

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