Stellar Sound, Inc. which uses a job-order costing system, had two jobs in proce

Question

Stellar Sound, Inc. which uses a job-order costing system, had two jobs in process at the start of 20x1: job no. 64 ($84,100) and job no. 65 ($53,400). The following information is available a. The company applies manufacturing overhead on the basis of machine hours (based on practical capacity). Budgeted overhead and machine activity for the year were anticipated to be $824,000, and 16,000 hours, respectively b. The company worked on four jobs during the first quarter. Direct materials used, direct labor incurred, and machine hours consumed were as follows: Direct Direct Machine Job No. Material Labor ours $21,000 $35,000 1,200 700 44,000 65, 000 2,000 500 64 65 22,000 67 15,000 8,800 C. Manufacturing overhead during the first quarter included charges for depreciation ($33,900), indirect labor ($60,200) indirect materials used ($5,000), and other factory costs ($139,600) d. Stellar Sound completed job no. 64 and job no. 65. Job no. 65 was sold on account, producing a profit of $34,800 for the firm Problem 3-45 Part 2 2. Prepare journal entries as of March 31 to record the following. (Note: Use summary entries where appropriate by combining individual job data.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) a. The issuance of direct material to production and the direct labor incurred

Explanation / Answer

Req 2: S.no. Accounts title and explanations Debit $ Credit $ a Work in process Inventory (Job no. 64) 21000 Work in process inventory(Job 66) 44000 Work in process inventory (Job 67) 15000     Raw material inventory 80000 Work in process Inventory (Job no. 64) 35000 Work in process inventory (Job 65) 22000 Work in process inventory(Job 66) 65000 Work in process inventory (Job 67) 8800       Wages payable 130800 b Manufacturing overheads Account Dr. 238700     Accumulated depreciation 33900 Wages payable 60200 raw material material inventory 5000 Cash 139600 c Work in process Inventory (Job no. 64) 61800 Work in process inventory (Job 65) 36050 Work in process inventory(Job 66) 103000 Work in process inventory (Job 67) 25750 Manufacturing overheads 226600 d. Finished Goods inventory Dr. 313350 Work in process Inv (Job 64) 201900 Work in process Inv. (Job 65) 111450 e Accounts Receivable Dr. 146250      Sales revenue 146250 Cost of Goods sold Account Dr. 111450 Finished Goods inventory 111450 Note: Pre-determined OH rate: $ 824,000 /16,000 MH = $ 51.50 per MH Note: Cost of Goods completed(Job 64/65) Job 64 Job 65 Beginning Balance 84100 53400 material 21000 0 labour 35000 22000 Overheads applied 61800 36050 Total cost of goods completed 201900 111450 Req 3: COST OF GOODS STILL IN PRODUCTION JOB 66 JOB 67 Beginning Balance 0 0 material 44000 15000 labour 65000 8800 Overheads applied 103000 25750 Total cost of goods in process 212000 49550 Req 4: FINISHED GOODS: Total cost of goods completed 313350 Less: cost of goods sold 111450 Increase in Finished Goods invnentory 201900 Req 5: Manufacturing Overheads incurred 238700 Less: Overheads applied 226600 Manufacturing Overheads under-applied 12100

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