Crenshaw uses a job order costing system to account for projects. It applies manufacturing overhead to jobs on the basis of direct labor hours and pays its direct labor workers $25 per hour. The following relates to activity for the month of December:
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| Manufacturing overhead budgeted (estimated on December 1) |
$ |
133,000 |
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| Budgeted driver activity (DLH) (estimated on December 1) |
|
1,900 |
DLH |
| Direct materials purchased in December |
$ |
125,000 |
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| Direct materials used in December |
|
100,000 |
|
| Actual direct labor costs in December |
|
50,000 |
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| Actual manufacturing overhead in December |
|
150,000 |
|
| Cost of jobs completed in December |
|
275,000 |
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| Revenue earned in December |
|
600,000 |
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| Cost of goods sold in December (prior to adjusting for overhead) |
|
325,000 |
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| Selling and administrative costs in December |
|
250,000 |
|
| Materials Inventory, December 1 |
|
20,000 |
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| Work in Process Inventory, December 1 |
|
75,000 |
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| Finished Goods Inventory, December 1 |
|
105,000 |
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| a. |
Record the purchase of direct materials in December. Assume all purchases are made on account. (Omit the "$" sign in your response.)
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| General Journal |
Debit |
Credit |
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| b. |
Record the cost of direct materials applied to jobs in December. (Omit the "$" sign in your response.) |
| General Journal |
Debit |
Credit |
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| c. |
Record the cost of direct labor applied to jobs in December. (Omit the "$" sign in your response.) |
| General Journal |
Debit |
Credit |
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| d. |
Record the actual cost of manufacturing overhead incurred in December. Assume all overhead costs were paid in cash. (Omit the "$" sign in your response.)
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| General Journal |
Debit |
Credit |
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| e. |
Record the cost of manufacturing overhead applied to jobs in December. (Omit the "$" sign in your response.)
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| General Journal |
Debit |
Credit |
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| f. |
Record revenue and the related cost of jobs sold in December. Assume all sales are made on account. (Omit the "$" sign in your response.)
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| General Journal |
Debit |
Credit |
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| g. |
Record December selling and administrative costs. Assume all selling and administrative costs were paid in cash.(Omit the "$" sign in your response.)
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| General Journal |
Debit |
Credit |
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| h. |
Close the Manufacturing Overhead account directly to Cost of Goods Sold on December 31. (Omit the "$" sign in your response.)
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| General Journal |
Debit |
Credit |
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| i. |
Compute the company's December income. Ignore taxes. (Omit the "$" sign in your response.) |