• 1. Purchased additional raw materials of $90,000 on account. • 2.Incurred factory labor costs of $70,000, Of this amount $16,000 related to employer payroll taxes. • 3.Incurred manufacturing overhead costs as follows: indirect materials $17,000, indirect labor $20,000, depreciation expense on equipment $12,000, and various other manufacturing overhead costs on account $16,000. • 4.Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,000 $ 5,000 51 39,000 25,000 52 30,000 20,000 Instructions a. Calculate the predetemined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. b. Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50. c. Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January. d. Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.
• 1. Purchased additional raw materials of $90,000 on account. • 2.Incurred factory labor costs of $70,000, Of this amount $16,000 related to employer payroll taxes. • 3.Incurred manufacturing overhead costs as follows: indirect materials $17,000, indirect labor $20,000, depreciation expense on equipment $12,000, and various other manufacturing overhead costs on account $16,000. • 4.Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,000 $ 5,000 51 39,000 25,000 52 30,000 20,000 Instructions a. Calculate the predetemined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. b. Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50. c. Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January. d. Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all costs to the job cost sheets as necessary.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Transcribed Image Text:m ם95ט וה . 11.
Mam Javeria Na...
1 minute ago
• 1.Purchased additional raw materials of $90,000 on account.
• 2.Incurred factory labor costs of $70,000. Of this amount $16,000 related to employer payroll taxes.
• 3.Incurred manufacturing overhead costs as follows: indirect materials $17.000, indirect labor $20,000,
depreciation expense on equipment $12,000, and various other manufacturing overhead costs on account
$16,000.
• 4.Assigned direct materials and direct labor to jobs as follows.
Job No.
Direct Materials
Direct Labor
50
$10,000
$ 5,000
51
39,000
25,000
52
30,000
20,000
Instructions
а.
Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing
overhead costs of S840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year.
b.
Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job 50.
с.
Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the
manufacturing overhead costs incurred during the month of January.
d.
Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead
costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). Post all
costs to the job cost sheets as necessary.
Try solving this.this is a very simple question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education