EXAMPLE 6 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 Work-in-Process Control, beginning balance, January 1, 2017 Finished Goods Control, beginning balance, January 1, 2017 Materials and supplies purchased on credit Direct materials used Indirect materials (supplies) issued to various production departments Direct manufacturing labor Indirect manufacturing labor incurred by various production departments Depreciation on plant and manufacturing equipment Miscellaneous manufacturing overhead incurred (ordinarily would be detailed as repairs, utilities, etc., with a corresponding credit to various liability accounts) Manufacturing overhead allocated, 3,000,000 actual machine-hours Cost of goods manufactured Revenues Cost of goods sold Required:+ $18 9 10 154 152 19 96 34+ 28 13 ? 298 410 294 1. Prepare an overview diagram of Donald Transport's job-costing system.+ 2. Prepare journal entries. Number your entries. Explanations for each entry may be omitted. Post to T-accounts. + 3. Show the journal entry for disposing of under- or overallocated manufacturing overhead directly as a year-end write-off to Cost of Goods Sold. Post the entry to T-accounts.+
EXAMPLE 6 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 Work-in-Process Control, beginning balance, January 1, 2017 Finished Goods Control, beginning balance, January 1, 2017 Materials and supplies purchased on credit Direct materials used Indirect materials (supplies) issued to various production departments Direct manufacturing labor Indirect manufacturing labor incurred by various production departments Depreciation on plant and manufacturing equipment Miscellaneous manufacturing overhead incurred (ordinarily would be detailed as repairs, utilities, etc., with a corresponding credit to various liability accounts) Manufacturing overhead allocated, 3,000,000 actual machine-hours Cost of goods manufactured Revenues Cost of goods sold Required:+ $18 9 10 154 152 19 96 34+ 28 13 ? 298 410 294 1. Prepare an overview diagram of Donald Transport's job-costing system.+ 2. Prepare journal entries. Number your entries. Explanations for each entry may be omitted. Post to T-accounts. + 3. Show the journal entry for disposing of under- or overallocated manufacturing overhead directly as a year-end write-off to Cost of Goods Sold. Post the entry to T-accounts.+
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:EXAMPLE 6 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
Work-in-Process Control, beginning balance, January 1, 2017
Finished Goods Control, beginning balance, January 1, 2017
Materials and supplies purchased on credit
Direct materials used
Indirect materials (supplies) issued to various production departments
Direct manufacturing labor
Indirect manufacturing labor incurred by various production departments
Depreciation on plant and manufacturing equipment
Miscellaneous manufacturing overhead incurred (ordinarily would be detailed as
repairs, utilities, etc., with a corresponding credit to various liability accounts)
Manufacturing overhead allocated, 3,000,000 actual machine-hours
Cost of goods manufactured
Revenues
Cost of goods sold
Required:+
$18
9
10
154
152
19
96
34+
28
13
?
298
410
294
1. Prepare an overview diagram of Donald Transport's job-costing system.+
2. Prepare journal entries. Number your entries. Explanations for each entry may be
omitted. Post to T-accounts. +
3. Show the journal entry for disposing of under- or overallocated manufacturing
overhead directly as a year-end write-off to Cost of Goods Sold. Post the entry to
T-accounts.+
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