Question:
1. Use information in below table to prepare journal entries for the following events for the month of May.
a. Factory payroll costs in cash.
b. Direct labor usage.
c. Indirect labor usage.
|
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April 30
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May 31
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Inventories
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|
|
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Raw materials
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$40,000
|
$ 50,000
|
|
Goods in process
|
9,600
|
19,500
|
|
Finished goods
|
60,000
|
33,200
|
|
Activities and information for May
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|
|
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Raw materials purchases (paid with cash)
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|
189,000
|
|
Factory payroll (paid with cash)
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|
400,000
|
|
Factory overhead
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|
|
|
Indirect materials
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|
12,000
|
|
Indirect labor
|
|
75,000
|
|
Other overhead costs
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|
100,500
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|
Sales (received in cash)
|
|
1,200,000
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|
Predetermined overhead rate based on direct labor cost
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65%
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2. Use information in above table to prepare journal entries for the following events for the month of May.
a. Factory overhead excluding indirect materials and indirect labor (record credit to Other Accounts).
b. Application of overhead to goods in process.
3. Prepare the journal entry accounting to above table to allocate (close) over applied or under applied overhead to Cost of Goods Sold.