Alake Company is a manufacturing firm that uses job-ordercosting. At the beginning of the year, the company's inventorybalances were as follows:
Raw materials$19,000
Work in process$82,000
Finished goods$32,000
The company applies overhead to jobs using a predeterminedoverhead rate based on machine-hours. At the beginning of the year,the company estimated (budget) that it would work 40,000machine-hours and incur $280,000 in manufacturing overhead cost(predetermined overhead rate). The following transactions wererecorded for the year:
a.Raw materials were purchased, $400,000.
b. Raw materials were requisitioned for use in production,$450,000 ($20,000 indirect).
c. The following employee costs were incurred: direct labor,$230,000; indirect labor, $65,000; and administrative salaries,$117,000.
d. Selling costs, $120,000.
e. Factory utility costs, $48,000.
f. Depreciation for the year was $150,000 of which $130,000 isrelated to factory operations and $20,000 is related to selling,general, and administrative activities.
g. Manufacturing overhead was applied to jobs. The actual levelof activity for the year was 38,000 machine-hours.
h.The cost of goods manufactured (completed) for the year was$800,000.
i. Sales for the year totaled $1,200,000 and the costs on thejob cost sheets of the goods that were sold totaled $900,000.
j. The balance in the Manufacturing Overhead account was closedout to Cost of Goods Sold. Show a "T" Account to calculate theover/under applied overhead.
Required: Prepare the appropriate journal entryfor each of the items above (a. through j. â one journalfor each item - TEN JOURNALS). You can assume that alltransactions with employees, customers, and suppliers wereconducted onaccount or credit.
Alake Company is a manufacturing firm that uses job-ordercosting. At the beginning of the year, the company's inventorybalances were as follows:
Raw materials$19,000
Work in process$82,000
Finished goods$32,000
The company applies overhead to jobs using a predeterminedoverhead rate based on machine-hours. At the beginning of the year,the company estimated (budget) that it would work 40,000machine-hours and incur $280,000 in manufacturing overhead cost(predetermined overhead rate). The following transactions wererecorded for the year:
a.Raw materials were purchased, $400,000.
b. Raw materials were requisitioned for use in production,$450,000 ($20,000 indirect).
c. The following employee costs were incurred: direct labor,$230,000; indirect labor, $65,000; and administrative salaries,$117,000.
d. Selling costs, $120,000.
e. Factory utility costs, $48,000.
f. Depreciation for the year was $150,000 of which $130,000 isrelated to factory operations and $20,000 is related to selling,general, and administrative activities.
g. Manufacturing overhead was applied to jobs. The actual levelof activity for the year was 38,000 machine-hours.
h.The cost of goods manufactured (completed) for the year was$800,000.
i. Sales for the year totaled $1,200,000 and the costs on thejob cost sheets of the goods that were sold totaled $900,000.
j. The balance in the Manufacturing Overhead account was closedout to Cost of Goods Sold. Show a "T" Account to calculate theover/under applied overhead.
Required: Prepare the appropriate journal entryfor each of the items above (a. through j. â one journalfor each item - TEN JOURNALS). You can assume that alltransactions with employees, customers, and suppliers wereconducted onaccount or credit.