Required information Problem 3-45 Job-Order Costing; Journal Entries (LO 3-2, 3-

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Required information Problem 3-45 Job-Order Costing; Journal Entries (LO 3-2, 3-4, 3-5) [The following information applies to the questions displayed below. 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 Hours 64 $21,000 $35,000 1,200 700 65,000 2,000 500 65 22,000 44,000 15,000 67 8,800 c. Manufacturing overhead during the first quarter included charges for depreciation ($32,900), indirect labor ($60,000) indirect materials used ($5,000), and other factory costs ($139,700) 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 b. The manufacturing overhead incurred during the quarter c. The application of manufacturing overhead to production d. The completion of jobs no. 64 and no. 65 e. The sale of job no. 65

Explanation / Answer

job 64 65 66 67 Beginning work in process 84,100 53,400 137,500 cost added during the year Direct materials 21,000 0 44,000 15,000 80,000 direct labor 35,000 22,000 65,000 8,800 130,800 overhead applied 61800 36050 103000 25750 226600 total cost added during the ye 117,800 58050 212,000 49,550 437,400 total cost. 201,900 111,450 212,000 49,550 574,900 overhead rate = 824000/16000 51.5 Tran General Journal Debit Credit a. work in process inventory 210,800 raw materials inventory 80,000 factory payroll 130,800 b. manufacturing overhead 237,600 accumulated depreciation 32,900 Accounts payable (60,000+5000+139700) 204,700 c. Work in process inventory 226600 manufacturing overhead d 226600 d. finished goods 313,350 work in process inventory 313,350 (201,900+111,450) e. cost of goods sold 111,450 finished goods inventory 111,450 Account receivable 146,250 sales (111450+34800) 146,250

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