Yu Technology Co. manufactures CDs and DVDs for computer software and entertainment companies. Yu uses job order costing and has a perpetual inventory system. The business has a highly labour intensive production process, so it applies manufacturing overhead to jobs based on direct labour cost. Yu expects to incur $1,080,000 0f manufacturing overhead costs and estimated direct labour costs of $900,000 during 2015. At the end of March 2015,
Yu Technology reported work in process inventory of $15,000
During April 2015, Yu Technology recorded the following transactions.
1) Materials requisitioned for use in production:
Direct materials: $120,000
Indirect materials: $20,000
2) Advertising costs were incurred, $15,000.
3) Salaries and wages incurred as follows:
Direct labour $121,875
Indirect labour $40,625
Selling and administrative salaries $ 25,000
4) Insurance expired during the year, $30,000 (90% relates to the factory, the remainder is on selling and administrative items).
5) Depreciation recorded for the year, $80,000 (75% relates to factory assets and the remainder relates to selling and administrative assets).
6) Utilities expense incurred, $53,750 (80% of this amount relates to the factory, the remainder relates to the administrative offices).
7) Applied manufacturing overhead costs to jobs
8) Two jobs were completed with total costs of $120,000 & $85,000 respectively. They were sold on account at a mark-up of 75% on cost.
All purchases and services were acquired on account.
1. State the journal entries necessary to record the above transactions in the general journal.
2. Is manufacturing overhead over-applied or under-applied? By how much?
3. Record a journal entry to close manufacturing overhead to cost of goods sold.
Yu Technology Co. manufactures CDs and DVDs for computer software and entertainment companies. Yu uses job order costing and has a perpetual inventory system. The business has a highly labour intensive production process, so it applies manufacturing overhead to jobs based on direct labour cost. Yu expects to incur $1,080,000 0f manufacturing overhead costs and estimated direct labour costs of $900,000 during 2015. At the end of March 2015,
Yu Technology reported work in process inventory of $15,000
During April 2015, Yu Technology recorded the following transactions.
1) Materials requisitioned for use in production:
Direct materials: $120,000
Indirect materials: $20,000
2) Advertising costs were incurred, $15,000.
3) Salaries and wages incurred as follows:
Direct labour $121,875
Indirect labour $40,625
Selling and administrative salaries $ 25,000
4) Insurance expired during the year, $30,000 (90% relates to the factory, the remainder is on selling and administrative items).
5) Depreciation recorded for the year, $80,000 (75% relates to factory assets and the remainder relates to selling and administrative assets).
6) Utilities expense incurred, $53,750 (80% of this amount relates to the factory, the remainder relates to the administrative offices).
7) Applied manufacturing overhead costs to jobs
8) Two jobs were completed with total costs of $120,000 & $85,000 respectively. They were sold on account at a mark-up of 75% on cost.
All purchases and services were acquired on account.
1. State the journal entries necessary to record the above transactions in the general journal.
2. Is manufacturing overhead over-applied or under-applied? By how much?
3. Record a journal entry to close manufacturing overhead to cost of goods sold.
Related questions
Yu Technology Co. manufactures CDs and DVDs for computer software and entertainment companies. Yu uses job order costing and has a perpetual inventory system. The business has a highly labour intensive production process, so it applies manufacturing overhead to jobs based on direct labour cost. Yu expects to incur $1,080,000 0f manufacturing overhead costs and estimated direct labour costs of $900,000 during 2015. At the end of March 2015,
Yu Technology reported work in process inventory of $15,000
During April 2015, Yu Technology recorded the following transactions.
1) Materials requisitioned for use in production:
Direct materials: $120,000
Indirect materials: $20,000
2) Advertising costs were incurred, $15,000.
3) Salaries and wages incurred as follows:
Direct labour $121,875
Indirect labour $40,625
Selling and administrative salaries $ 25,000
4) Insurance expired during the year, $30,000 (90% relates to the factory, the remainder is on selling and administrative items).
5) Depreciation recorded for the year, $80,000 (75% relates to factory assets and the remainder relates to selling and administrative assets).
6) Utilities expense incurred, $53,750 (80% of this amount relates to the factory, the remainder relates to the administrative offices).
7) Applied manufacturing overhead costs to jobs
8) Two jobs were completed with total costs of $120,000 & $85,000 respectively. They were sold on account at a mark-up of 75% on cost.
All purchases and services were acquired on account.
| (d) Record a journal entry to close manufacturing overhead to cost of goods sold. | ||||||||
| (e) Prepare an income statement for the year | ||||||||
| (f) Determine the balance in work in process inventory on April 30. | ||||||||
