Problem
Part of the practice exercises for finals, help appreciated since this is extremely complicated for me
AT&T Manufacturing presents two direct costs: Direct Material and Direct Labor and a Pool of Indirect Costs. The distribution base of these indirect costs is 175% of Direct Labor. The following transactions for the year 2021 are as follows.
1. Direct materials purchased on credit $3,200.
2. Direct materials used in production $2,840.
3. Indirect materials allocated to "Jobs" $400.
4. Direct labor $5,200.
5. Indirect labor $3,600.
6. Depreciation of manufacturing equipment $1,600.
7. Other manufacturing expenses $2,200.
8. Distributed manufacturing costs - 175% of direct labor.
9. Cost of manufactured goods $16,800.
10. Credit income $34,000.
11. Cost of goods sold $16,200.
12. Inventories as of 12/31/2015
Material - control $400
Work in process - control $240
Finished goods - control $2,000
Task
A. Prepare the cost flow chart properly identified and detailed.
B. Jornalize the transactions described above. The under/over allocation of the overhead close against cost of goods sold.
C. Prepare the T-accounts for the following accounts only: Direct Material - Control; Work in Process - Control; Finished Goods - Control; Cost of Goods Sold; Manufacturing Overhead - Control; Manufacturing Overhead - Control; Manufacturing Overhead - Allocated; and Manufacturing Overhead - Allocated.