4.2C Company uses job-order costing. It applies overhead cost to jobs on the basis of direct laborhours.Thefollowingtransactionstookplaceduringtheyear: a) $300,000 of raw materials were purchased on account b) Raw materials were issued into production: $90,000 direct materials and $40,000 indirect materials c) Labor costs incurred: $40,000 direct, $130,000 indirect, sales commissions $50,000, administrative salaries $100,000 d) Utility costs for the factory were $60,000 e) Depreciation recorded was $300,000 (70% related to factory; 30% related to administrative offices) f) Manufacturing overhead of $715,000 was applied to production. Actual direct labor-hours incurred were 22,000. g) Jobs costing $300,000 were completed and transferred into the finished goods inventory. h) Jobs with a cost of $150,000 were sold on account for $200,000.i) Closed the under/over applied overhead for the year. Required: Prepare the necessary journal entries and summarize their balance using T-Account

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter2: Job Order Costing
Section: Chapter Questions
Problem 1PA: Barnes Company uses a job order cost system. The following data summarize the operations related to...
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4.
2C Company uses job-order costing. It applies overhead cost to jobs on the basis of direct laborhours.
The
following
transactions
took
place
during
the
year:


a) $300,000 of raw materials were purchased on account
b) Raw materials were issued into production: $90,000 direct materials and $40,000 indirect materials
c) Labor costs incurred: $40,000 direct, $130,000 indirect, sales commissions $50,000, administrative
salaries $100,000
d) Utility costs for the factory were $60,000
e) Depreciation recorded was $300,000 (70% related to factory; 30% related to administrative offices)
f) Manufacturing overhead of $715,000 was applied to production. Actual direct labor-hours incurred
were 22,000.
g) Jobs costing $300,000 were completed and transferred into the finished goods inventory.
h) Jobs with a cost of $150,000 were sold on account for $200,000.
i) Closed the under/over applied overhead for the year.
Required: Prepare the necessary journal entries and summarize their balance using T-Account

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