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Kapoor Company uses job-order costing. During January, the following data were reported:
a. Materials purchased on account: direct materials, $98, 500: indirect materials, $14, 800.
b. Materials issued: direct materials, $82, 500: indirect materials, $8, 800.
c. Labor cost incurred: direct labor, $67, 000: indirect labor, $18, 750.
d. Other manufacturing costs incurred (all payables), $46, 200.
e. Overhead is applied on the basis of 110 percent of direct labor cost.
f. Work finished and transferred to Finished Goods Inventory cost $230, 000.
g. Finished goods costing $215, 000 were sold on account for 140 percent of cost.
h. Any over-or under applied overhead is closed to Cost of Goods Sold.
1. Prepare journal entries to record these transactions.
2. Prepare a T-account for Overhead Control. Post all relevant information to this account. What is the ending balance in this account?
3. Prepare a T-account for Work-in-Process Inventory. Assume a beginning balance of $10, 000, and post all relevant information to this account. Did you assign any actual overhead costs to Work-in-Process Inventory? Why or why not?

Sagot :

Answer:

a. Direct Material Purchases (Dr.) $98,500

Indirect Material Purchase (Dr.) $14,800

Accounts Payable (Cr.) $113,300

b. Direct Material Issued (Dr.) $82,500

Indirect Material Issued (Dr.) $8,800

Cost of Goods Manufactured (Cr.) $91,300

c. Direct Labor Cost Incurred (Dr.) $67,000

Indirect Labor Cost Incurred (Cr.) $18,750

Manufacturing Conversion Cost (Cr.) $85,750

d. Manufacturing Overhead (Dr.) $46,200

Factory Overhead (Cr.) $46,200

Explanation:

Journal entries are prepared for the issuance of material and labor cost to the manufacturing department. These transactions are recorded to identify the cost of factory overhead and conversions costs.

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