Reference no: EM13823386
Marco Boats Inc. uses a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:
1. Purchased raw materials on account, $250,000.
2. An analysis of the requisitions shows the following: Direct materials requisitioned during the month:
Job 101 $30,000
Job 102 29,000
Job 103 40,000
$99,000
3. Factory labor costs incurred were $83,000 of which $70,000 pertained to factory wages payable and $13,000 pertained to employer payroll taxes payable.
4. An analysis of the time tickets indicated the following: Direct labor incurred and charged to jobs during the month was:
Job 101 $41,000
Job 102 37,000
Job 103 25,000
$103,000
5. Incurred manufacturing overhead costs as follows: indirect labor $10,000, indirect materials $8,000 and depreciation $11,000. Also, incurred $25,000 of manufacturing overhead costs on account.
6. Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 125% of direct labor costs.
7. Job 101 and Job 103 were completed during the month. (Note: show your work in part b. below.)
8. Job 101 was sold on account for $140,000.
Instructions:
a. Prepare journal entries to record the above transactions.
b. Compute the cost of Job 101, Job 102 and Job 103.
c. Compute the balance in the Work-in-Process account at the end of the month.
d. Compute the amount of over/under applied overhead.
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