The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing. Purchased $75,180 in materials on account. Issued $2,100 in supplies from the materials inventory to the production department. Paid for the materials purchased in transaction (1). Issued $35,700 in direct materials to the production department. Incurred wage costs of $58,800, which were debited to Payroll, a temporary account. Of this amount, $18,900 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $39,900 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. Recognized $29,400 in fringe benefit costs, incurred as a result of the wages paid in (5). This $29,400 was debited to Payroll and credited to Fringe Benefits Payable Analyzed the Payroll account and determined that 60 percent represented direct labor; 30 percent, indirect manufacturing labor; and 10 percent, administrative and marketing costs. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $45,360. Applied overhead on the basis of 175 percent of direct labor costs. Recognized depreciation of $24,150 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions. b. The balances that appeared in the accounts of Apex Manufacturing are shown as follows. Beginning Ending Materials Inventory $ 77,805 — Work-in-Process Inventory 17,325 — Finished Goods Inventory 87,150 $ 69,720 Cost of Goods Sold — 138,285 Prepare T-accounts to show the flow of costs during the period.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter26: Manufacturing Accounting: The Job Order Cost System

Section: Chapter Questions

Problem 8SPA: JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD Eto Manufacturing had the following transactions...

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The following transactions occurred in January at Apex Manufacturing, a custom parts supplier. Apex uses job costing.

Purchased $75,180 in materials on account.
Issued $2,100 in supplies from the materials inventory to the production department.
Paid for the materials purchased in transaction (1).
Issued $35,700 in direct materials to the production department.
Incurred wage costs of $58,800, which were debited to Payroll, a temporary account. Of this amount, $18,900 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $39,900 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll.
Recognized $29,400 in fringe benefit costs, incurred as a result of the wages paid in (5). This $29,400 was debited to Payroll and credited to Fringe Benefits Payable
Analyzed the Payroll account and determined that 60 percent represented direct labor; 30 percent, indirect manufacturing labor; and 10 percent, administrative and marketing costs.
Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $45,360.
Applied overhead on the basis of 175 percent of direct labor costs.
Recognized depreciation of $24,150 on manufacturing property, plant, and equipment.

Required:

a. Prepare journal entries to record these transactions.

b. The balances that appeared in the accounts of Apex Manufacturing are shown as follows.

	Beginning	Ending
Materials Inventory	$	77,805		—
Work-in-Process Inventory		17,325		—
Finished Goods Inventory		87,150	$	69,720
Cost of Goods Sold		—		138,285

Prepare T-accounts to show the flow of costs during the period.

Definition Definition Benefits in addition to compensation that companies give to their employees. Fringe benefits can boost morale and productivity and keep employees motivated. Companies often use fringe benefits as a competitive advantage to recruit and retain employees. Examples of fringe benefits include pensions, vacation time, tuition reimbursement, free or subsidized meals, and gym memberships.

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