Reference no: EM131872823

Question - Quark Spy Equipment manufactures espionage equipment. Quark uses a job-order cost system and applies overhead to jobs the basis of direct labor-hours. For the current year, Quark estimated that it would work 100,000 direct labor-hours and incur $20,000,000 of manufacturing overhead cost. The following summarized information relates to January of the current year. The raw materials purchased include both direct and indirect materials.

Raw materials purchased on account.......................................................... $1,412,000

Direct materials requisitioned into production................................................ 1,299,500

Indirect materials requisitioned into production.............................................. 98,000

Direct labor cost (7,900 hours @$40 per hour).............................................. 316,000

Indirect labor cost (10,200 hours @ $16 per hour).......................................... 163,200

Depreciation on the factory building............................................................ 190,500

Depreciation on the factory equipment......................................................... 890,700

Utilities for the factory............................................................................... 79,600

Cost of jobs finished................................................................................. 2,494,200

Cost of jobs sold...................................................................................... 2,380,000

Sales (all on account)............................................................................... 3,570,000

Required: Prepare journal entries to record Quark's transaction for the month of January. Do not close out the manufacturing overhead account.