B-19.07 Problem

B-19.07 Problem - If the scenario involves underapplied or...

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B-19.07 Information for three different companies follows. Each company applies factory overhead at the rate of 40% of direct labor cost. In each scenario, the following entry was made to record the actual overhead costs: Factory Overhead Salaries Payable Utilities Payable Supplies Accumulated Depreciation 85,000 50,000 15,000 4,000 16,000 Prepare a compound journal entry for each company to transfer raw materials to production, record direct labor costs on each job, and apply overhead at the predetermined rate.
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Unformatted text preview: If the scenario involves underapplied or overapplied overhead, prepare an additional journal entry to transfer the amount to Cost of Goods Sold. Company A Raw materials transferred to production totaled $100,000, and direct labor cost was $212,500. Company B Raw materials transferred to production totaled $110,000, and direct labor cost was $200,000. Company C Raw materials transferred to production totaled $90,000, and direct labor cost was $225,000....
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