The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company’s fiscal year: Raw materials were purchased on account, $300,000. Raw materials were issued to production, $290,000 ($228,000 direct materials and $62,000 indirect materials). Direct labour cost was incurred, $110,000; indirect labour cost was incurred, $90,000. Depreciation was recorded on factory equipment, $70,000. Other manufacturing overhead costs were incurred during October, $140,000 (credit accounts payable). The company applies manufacturing overhead cost to production on the basis of $12.60 per machine-hour. There were 30,000 machine-hours recorded for October. Production orders costing $720,000 according to their job cost sheets were completed during October and transferred to finished goods. Production orders that had cost $680,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold at 25% above cost. The goods were sold on account. Required: Prepare journal entries to record the preceding information. Prepare T-accounts for manufacturing overhead and work in process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that work in process has a beginning balance of $42,000.

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...
icon
Related questions
icon
Concept explainers
Topic Video
Question

The Polaris Company uses a job-order costing system. The following data relate to October, the first month of the company’s fiscal year:

  1. Raw materials were purchased on account, $300,000.
  2. Raw materials were issued to production, $290,000 ($228,000 direct materials and $62,000 indirect materials).
  3. Direct labour cost was incurred, $110,000; indirect labour cost was incurred, $90,000.
  4. Depreciation was recorded on factory equipment, $70,000.
  5. Other manufacturing overhead costs were incurred during October, $140,000 (credit accounts payable).
  6. The company applies manufacturing overhead cost to production on the basis of $12.60 per machine-hour. There were 30,000 machine-hours recorded for October.
  7. Production orders costing $720,000 according to their job cost sheets were completed during October and transferred to finished goods.
  8. Production orders that had cost $680,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold at 25% above cost. The goods were sold on account.

Required:

  1. Prepare journal entries to record the preceding information.
  2. Prepare T-accounts for manufacturing overhead and work in process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that work in process has a beginning balance of $42,000.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 3 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,