Southworth Co Problem 2016 - Comprehensive Problem for Job...

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Comprehensive Problem for Job Order Costing - Journal Entries; T-Accounts; Financial Statements. Southworth Company uses job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. At the beginning of the current year, the following estimates were made for the purposes of computing the predetermined overhead rate: manufacturing overhead cost, $248,000; and direct materials cost, $155,000. The following transactions took place during the year (all purchases and services were acquired on account): a. Raw materials purchased, $142,000. b. Raw materials were requisitioned for use in production (all direct materials), $150,000. c. Utility bills incurred in the factory, $21,000. d. Costs for salaries and wages were incurred as follows: Direct labor…………………………... $216,000 Indirect labor………………………… 90,000 Selling and administrative salaries…... 145,000 e. Maintenance costs incurred in the factory, $15,000.
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