Problem 3-30 Comprehensive Problem: Journal Entries; T-Accounts;
Financial Statements [LO3, LO4, LO5, LO6, LO7, LO8]
Southworth Company uses a 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 purpose 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.
Raw materials requisitioned for use in production (all direct materials),
c. Utility bills incurred in the factory, $21,000.
d. Costs for salaries and wages were incurred as follows:
Selling and administrative
e. Maintenance costs incurred in the factory, $15,000.
f. Advertising costs incurred, $130,000.
g. Depreciation recorded for the year, $50,000 (90% relates to factory assets, and