1 Job Cost Journal Entries Prior to the beginning of 2019, Lowe Company estimated that it would incur 2 $176,000 of manufacturing overhead cost during 2019, using 16,000 direct labor hours to produce 3 the desired volume of goods. On January 1, 2019, beginning balances of Materials Inventory, Work-in- 4 Process Inventory, and Finished Goods Inventory were $28,000, S-0-, and $43,000, respectively. To apply manufacturing overhead 6 Required Rate Hours Overhead rate Prepare general journal entries to record the following for 2019: 7 $ Rate Hours 8 a. Purchased materials on account, $39,000. Labor hours b. Of the total dollar value of materials used, $31,000 represented direct materials and $11,000 Applied overhead 10 indirect materials. 11 c. Determined total factory labor, $135,000 (15,000 hrs. @ $9/hr.). 12 d. Of the factory labor, 80 % was direct and 20% indirect. 13 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.) g. Ending inventories of work-in-process and finished goods were $32,000 and $57,000, respectively. 14 To record other manufacturing overhead incurred. 15 16 g. 17 To record cost of finished goods Determine the cost of finished goods (credit WIP) and the cost of goods sold (credit FG inventory). Make separate entries. h. Transferred the balance in Manufacturing Overhead to Cost of Goods Sold. 18 19 Work in process: 20 Beginning balance Charges per entries: 21 22 b. General Journal 23 d. 24 Item Debit Credit Description e. Raw Materials Inventory 25 a. Total cost 39,000 Accounts Payable Purchased materials on account. Less ending balance Cost of finished goods 26 39,000 27 28 29 b. Work in process 31,000 Manufacturing overhead Raw materials inventory 11,000 30 31 42,000 To record cost of goods sold. To record requisition of direct material and indirect material. 32 33 Finished goods: 34 c.& d. Work in process (80%) 108,000 Beginning balance Cost of goods manufactured Finished goods available Less: Ending balance Cost of goods sold Manufacturing overhead Factory payroll To record distribution of employee wages 35 27,000 36 135,000 37 38 39 40 41 42 43 44 45 46 To transfer over-applied overhead to the Cost of Goods Sold account. Manufacturing overhead: Charges per entries: d. 47 f 48 49 Total actual overhead Applied overhead 50 Over-applied overhead 51 52 53 54