Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The jou
rnal entry to record June production activities for overhead allocation is:
Direct materials used $ 104,000
Direct labor used 177,000
Predetermined overhead rate (based on direct labor) 160 %
Goods transferred to finished goods 449,000
Cost of goods sold 461,000
Credit sales 980,000
a. Debit Work in Process Inventory $177,000; credit Factory Overhead $177,000.
b. Debit Factory Overhead $283,200; credit Cash $283,200.
c. Debit Work in Process Inventory $177,000; credit Cash $177,000.
d. Debit Work in Process Inventory $283,200; credit Factory Overhead $283,200.
e. Debit Work in Process Inventory $177,000; credit Factory Payroll $177,000.
Direct materials used $ 104,000
Direct labor used 177,000
Predetermined overhead rate (based on direct labor) 160 %
Goods transferred to finished goods 449,000
Cost of goods sold 461,000
Credit sales 980,000
a. Debit Work in Process Inventory $177,000; credit Factory Overhead $177,000.
b. Debit Factory Overhead $283,200; credit Cash $283,200.
c. Debit Work in Process Inventory $177,000; credit Cash $177,000.
d. Debit Work in Process Inventory $283,200; credit Factory Overhead $283,200.
e. Debit Work in Process Inventory $177,000; credit Factory Payroll $177,000.
1 answer:
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Answer:
Option (B) is correct.
Explanation:
Equivalent units of production(EUP) - Materials:
= Transferred out + Ending balance
= 10,451 units × 100% + 3,483 units × 100%
= 10,451 + 3,483
= 13,934
Equivalent units of production(EUP) - conversion:
= Transferred out + Ending balance
= 10,451 units × 100% + 3,483 units × 36%
= 10,451 + 1,253.88
= 11,704.88
Material cost =
Material cost =
= 73,157
Conversion cost =
Conversion cost =
Conversion cost =
= 53,715
Therefore,
Total cost of units completed during the period(10,451 units):
= Material cost + Conversion cost
= 73,157 + 53,715
= 126,872