Chapter 4, Problem 4.31E

Job costing, journal entries. Donald Transport assembles prestige manufactured homes. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $31 per machine-hour in 2017). The following data (in millions) show operation costs for 2017:

Materials Control, beginning balance, January 1, 2017	$18
Work-in-Process Control, beginning balance, January 1, 2017	9
Finished Goods Control, beginning balance, January 1, 2017	10
Materials and supplies purchased on credit	154
Direct materials used	152
Indirect materials (supplies) issued to various production departments	19
Direct manufacturing labor	96
Indirect manufacturing labor incurred by various production departments	34
Depreciation on plant and manufacturing equipment	28
Miscellaneous manufacturing overhead incurred (ordinarily would be detailed as repairs, utilities, etc., with a corresponding credit to various liability accounts)	13
Manufacturing overhead allocated, 3,000,000 actual machine-hours	?
Cost of goods manufactured	298
Revenues	410
Cost of goods sold	294

1. 1. Prepare an overview diagram of Donald Transport’s job-costing system.

  Required

1. 2. Prepare journal entries. Number your entries. Explanations for each entry may be omitted. Post to T-accounts. What is the ending balance of Work-in-Process Control?
2. 3. Show the journal entry for disposing of under- or overallocated manufacturing overhead directly as a year-end writeoff to Cost of Goods Sold. Post the entry to T-accounts.
3. 4. How did Donald Transport perform in 2017?