Chapter 3, Problem 3.27AE

Record journal entries (Learning Objectives 2, 3, 5, & 6)

The following transactions were incurred by Howe Fabricators during January, the first month of its fiscal year.

3.1-73 Full Alternative Text

Requirements

1. 1. Record the proper journal entry for each transaction.
2. 2. $215,000 of materials was purchased on account.
3. 3. $190,000 of materials was used in production; of this amount, $164,000 was used on specific jobs.
4. 4. Manufacturing labor and salaries for the month totaled $210,000. A total of $180,000 of manufacturing labor and salaries was traced to specific jobs, and the remainder was indirect labor used in the factory.
5. 5. The company recorded $15,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $8,000 which will be paid at a later date.
6. 6. $70,000 of manufacturing overhead was allocated to specific jobs.
7. 7. The company received a bill for CAD design services for $9,000.
8. 8. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?