Answer:
raw materials 39,000 debit
accounts payable 39,000 credit
WIP inventory 31,000 debit
factor overhead 11,000 debit
raw materials 42,000 credit
WIP materials 108,000 debit
factory overhead 27,000 debit
wages payable 135,000 credit
WIP invenotry 165,000 debit
factory overhead 165,000 credit
factory overhead 92,000 debit
accounts payable 92,000 credit
factory overhead 35,000 debit
cost of goods sold 35,000 credit
Questions:
a. Purchased materials on account, $39,000.
b. Of the total dollar value of materials used, $31,000 represented direct material and $11,000 indirect material.
c. Determined total factory labor, $135,000 (15,000 hrs. @ $9/hr.)
d. Of the factory labor, 80% was direct and 20% indirect.
e. Applied manufacturing overhead based on direct labor hours to work in process.
f. Determined actual manufacturing overhead other than those items already recorded, $92,000. (Credit Accounts Payable.)
Explanation:
predetermined overhead rate:
expected overhead / expeected labor hours
176,000 / 16,000 = $11
applied 15,000 x $11 = 165,000
factory overhead reconciliaiton:
92,000 + 27,000 + 11,000 = 130,000
applied 165,000
overapplied by 35,000
