Question

Munson Co. uses a job order cost system. The following data summarize the operations related Obj. 2 to production for July:A. Materials purchased on account, $225,750.B. Materials requisitioned $217,600, of which $17,600 was for general factory use.C. Factory labor used $680,000, of which $72,300 was indirect.D. Other costs incurred on account for factory overhead, $330,000; selling expenses, $180,000; and administrative expenses, $126,000.E. Prepaid expenses expired for factory overhead were $27,500; for selling expenses, $8,100; and for administrative expenses, $5,250.F. Depreciation of office building was $44,500; of office equipment, $16,800; and of factory equipment, $55,100.G. Factory overhead costs applied to jobs, $548,000.H. Jobs completed $1,140,000.I. Cost of goods sold, $1,128,000.Instructions:Journalize the entries to record the summarized operations.

Answer 1

Answer:

raw materials inventory    225,750

            account payable                225,750

to record purchase of materials

WIP                     217,600 debit

factory overhead 17,600 debit

   raw materials                   225,750 credir

to record use of materials

WIP                        606,700 debit

factory overhead    72,300 debit

         wages payable                        680,000

to record wages for the period

factory overhead            330,000

selling expense               180,000

administrative expense  126,000

     account payable                        636,000

to record other expenses on account

factory overhead           27,500

selling expense               8, 100

adm expense                  5, 250

      prepaid expenses                      40,850

to record expired prepaid

factory overhead         55,100

depreciation expense 61,300

 acc depreciation factory equipmnet       55,100

 acc depreciation office equipment         16,800

 acc depreciation building                       44,500

to record depreciation for the period

WIP    548,000

factory overhead     548,000

to record applied overhead

Finished Goods 1,140,000

          WIP                              1,140,000

to record jobs completed

COGS               1,128,000

        Finished Goods        1,128,000

to record COGS

Factory Overhead    45,500 debit

                   COGS                             45,500 credit

to record adjustment for overapplied factory overhead

Explanation:

For each entry we will make sure to make the difference between capitalized cost (factory overhead labor and materials) and cost for the period (selling and administrative expenses)

Then we will do the adjustment for hte overhead

adjustment for overhead:

actual overhead:

   17,600 indirect materials

  72,300 indirect labor

330,000 other expenses

27,500 expired prepaid

55,100 depreciation equipment

502,500 actual overhead

548,000 applied overhead

The actual cost were lower than expected, we charge more cost on the goods than we should, so we adjust and decrease the Cost of Goods Sold.

adjusment for overapplied overhead: 45,500