Direct manufacturing labor up to 1230 payroll 168000 Manufacturing overhead

Direct manufacturing labor up to 1230 payroll 168000

This preview shows page 57 - 60 out of 70 pages.

Direct manufacturing labor up to 12/30 payroll = $168,000 Manufacturing overhead allocated up to 12/30 = 1.10 × $168,000 = $184,800 Total direct manufacturing labor for December = $168,000 + $8,600 (direct manufacturing labor for 12/31 calculated in requirement 1) = $176,600 Total manufacturing overhead allocated for December = $184,800 + $9,460 c = $194,260 c $8,600 × 110% = $9,460, manufacturing overhead allocated on $8,600 of direct manufacturing labor incurred on 12/31. (b) Total direct manufacturing labor for December = $176,600. (c) Total manufacturing overhead allocated (recorded) in work in process equals $194,260. (d) Ending balance in work-in-process inventory on December 31 equals $18,000 + $8,600 (direct manufacturing labor added on 12/31, requirement 1) + $9,460 (manufacturing overhead allocated on 12/31, requirement 1) = $36,060. An alternative approach to solving requirements 2b, 2c, and 2d is to calculate the work-in- process inventory on December 31, recognizing that because no new units were started or completed, no direct materials were added and the direct manufacturing labor and manufacturing overhead allocated on December 31 were added to the work-in-process inventory balance of December 30. Work-in-process inventory on 12/31 = Work-in-process inventory on 12/30 + Direct manufacturing labor incurred on 12/31 + Manufacturing overhead allocated on 12/31 = $18,000 + $8,600 + $9,460 = $36,060 We can now use the T-account equation for work-in-process inventory account from 12/1 to 12/31, as follows. Let x = Direct manufacturing labor for December Then 1.10 x = Manufacturing overhead allocated for December Work-in- process inventory on 12/1 + Direct materials added in December + Direct manufacturing labor added in December + Manufacturing overhead allocated in December Cost of goods manufactured in December = Work-in- process inventory on 12/31 $13,400 + $119,800 + x + 1.10 x – $468,000 = $36,060 2.10 x = $36,060 – $13,400 – $119,800 + $468,000 2.10 x = $370,860 x = $370,860 $176,600 2.10 =
Image of page 57
4-58 Total direct manufacturing labor for December = $176,600 Total manufacturing overhead allocated in December = 1.10 × $176,600 = $194,260 Finished Goods Control Beginning balance 12/1 Cost of goods manufactured 8,800 468,000 438,000 c Cost of goods sold Balance 12/31 38,800 c $8,800 + $468,000 – $38,800 = $438,000 (e) Cost of goods sold for December before adjustments for under- or overallocated overhead equals $438,000: Cost of Goods Sold Cost of goods sold 438,000 3,460 (c) Closing entry Manufacturing Department Overhead Control Balance through 12/30 (a) Indirect manufacturing labor 12/31 188,000 2,800 190,800 (c) Closing entry Manufacturing Overhead Allocated (c) Closing entry 194,260 184,800 9,460 Balance through 12/30 (b) Manufacturing overhead allocated, 12/31 Wages Payable Control 2,800 (a) 12/31 payroll 3. Closing entries: (c) Manufacturing Overhead Allocated 194,260 Manufacturing Department Overhead Control 190,800 Cost of Goods Sold 3,460 To close manufacturing overhead accounts and overallocated overhead to cost of goods sold
Image of page 58
4-59 4-44 Allocation and proration of overhead. Resource Room prints custom training material for corporations. The business was started January 1, 2017. The company uses a normal-costing system. It has two direct-cost pools, materials and labor, and one indirect-cost pool, overhead.
Image of page 59
Image of page 60

You've reached the end of your free preview.

Want to read all 70 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture