Record the application of manufacturing overhead toproduction.1Record the actual manufacturing overhead cost incurred.The credit can be to a generic account titled Cash,Payables and so on.Record the transfer of manufacturing overhead accountbalance to cost of goods sold.3. Verizox Company uses a job order cost system with manufacturing overhead applied to products based on direct labor hours. At thebeginning of the most recent year, the company estimated its manufacturing overhead cost at $182,400. Estimated direct labor costwas $446,500 for 19,000 hours.Actual costs for the most recent month are summarized here:TotalItem DescriptionDirect labor (1,900 hours)Cost$44,651Indirect costsIndirect labor2,4603,4403,3704,750Indirect materialsFactory rentFactory supervisionFactory depreciationFactory janitorial workFactory insuranceGeneral and administrative salaries5,7301,1501,8904,2005,370Selling expenses

1) Overhead rate = $182,400/19000 = 9.60 per labor hour Journal entry Transaction General Journal…

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Record the application of manufacturing overhead to production. 1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Record the application of manufacturing overhead to
production.
1
Record the actual manufacturing overhead cost incurred.
The credit can be to a generic account titled Cash,
Payables and so on.
Record the transfer of manufacturing overhead account
balance to cost of goods sold.
3.

Verizox Company uses a job order cost system with manufacturing overhead applied to products based on direct labor hours. At the
beginning of the most recent year, the company estimated its manufacturing overhead cost at $182,400. Estimated direct labor cost
was $446,500 for 19,000 hours.
Actual costs for the most recent month are summarized here:
Total
Item Description
Direct labor (1,900 hours)
Cost
$44,651
Indirect costs
Indirect labor
2,460
3,440
3,370
4,750
Indirect materials
Factory rent
Factory supervision
Factory depreciation
Factory janitorial work
Factory insurance
General and administrative salaries
5,730
1,150
1,890
4,200
5,370
Selling expenses

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