Entries for Costs in a Job Order Cost System Royal Technology Company uses a job
ID: 2547119 • Letter: E
Question
Entries for Costs in a Job Order Cost System
Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:
Materials purchased on account, $644,310.
Materials requisitioned, $541,220, of which $70,360 was for general factory use.
Factory labor used, $663,640, of which $126,090 was indirect.
Other costs incurred on account for factory overhead, $154,630; selling expenses, $238,390; and administrative expenses, $141,750.
Prepaid expenses expired for factory overhead were $29,640; for selling expenses, $25,130; and for administrative expenses, $18,040.
Depreciation of factory equipment was $29,640; of office equipment, $43,810; and of office building, $86,340.
Factory overhead costs applied to jobs, $367,260.
Jobs completed, $850,490.
Cost of goods sold, $824,720.
Required:
Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank.
a. Materials purchased on account, $644,310.
b. Materials requisitioned, $541,220, of which $70,360 was for general factory use.
c. Factory labor used, $663,640, of which $126,090 was indirect.
d. Other costs incurred on account for factory overhead, $154,630; selling expenses, $238,390; and administrative expenses, $141,750.
e. Prepaid expenses expired for factory overhead were $29,640; for selling expenses, $25,130; and for administrative expenses, $18,040.
f. Depreciation of factory equipment was $29,640; of office equipment, $43,810; and of office building, $86,340.
g. Factory overhead costs applied to jobs, $367,260.
h. Jobs completed, $850,490.
i. Cost of goods sold, $824,720.
Entry Description Debit Credit a.Explanation / Answer
Solution: Entry Description Debit Credit a. Raw Material Inventory 644,310 Accounts Payable 644,310 b. Work in Process 470,860 Factory Overhead 70,360 Raw Material Inventory 541,220 Working Notes: Work in Process 470,860 [541,220 - 70,360 = 470,860] Factory Overhead 70,360 Raw Material Inventory 541,220 c. Work in Process 537,550 Factory Overhead 126,090 Wages Payable 663,640 Working Notes: Work in Process 537,550 [663,640 - 126,090 = 537,550] Factory Overhead 126,090 Wages Payable 663,640 d. Factory Overhead 154,630 Selling Expense 238,390 Administrative Expense 141,750 Accounts Payable 534,770 Working notes: Factory Overhead 154,630 Selling Expense 238,390 Administrative Expense 141,750 Accounts Payable 534,770 [154,630+238,390+141,750] e. Factory Overhead 29,640 Selling Expense 25,130 Administrative Expense 18,040 Prepaid Expense 72,810 Working Notes: Factory Overhead 29,640 Selling Expense 25,130 Administrative Expense 18,040 Prepaid Expense 72,810 [29,640+25,130+18,040 =72,810] since, when prepaid expense expired , it will be now booked as expense in that period. f. Factory Overhead 29,640 Depreciation – Office Equipment 43,810 Depreciation Expense –Office Building 86,340 Accumulated Depreciation – Factory Equipment 29,640 Accumulated Depreciation – Office Equipment 43,810 Accumulated Depreciation – Office Building 86,340 g. Work in Process 367,260 Factory Overhead 367,260 i. Finished Goods Inventory 850,490 Work in Process 850,490 j. Cost of Goods Sold 824,720 Finished Goods Inventory 824,720 Please feel free to ask if anything about above solution in comment section of the question.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.