Answer:
raw materials 210,000 debit
account payable 210,000 credit
--to record purchase of raw materials on account--
WIP 178,000 debit
Manufacturing overhead 12,000 debit
Raw materials 190,000 credit
-- to record use of materials during the period--
WIP 90,000 debit
Manufacturing overhead 110,000 debit
Wages payable 200,000 credit
-- to record accrued labor during the period--
Manufacturing overhead 40,000 debit
Accumulated depreciation equipment 40,000 credit
-- to record accrued labor during the period--
Manufacturing overhead 70,000 debit
Account payable 70,000 credit
--to record other overhead cost accrued--
WIP 240,000 debit
Manufacturing Overhead 240,000 credit
--to record applied overhead--
Finished Goods 520,000 debit
WIP 520,000 credit
--to record transferred-out goods for the period--
Accounts receivable 600,000 debit
Sales Revenue 600,000 credit
--to record sales revenue--
COGS 480,000 debit
Finished Goods 480,000 credit
--to record cost of goods sold --
Overhead
Debit Credit
12,000
110,000
40,000
70,000
<u> 240,000</u>
<u>232,000 240,000</u>
Balance: 8,000
WIP
Debit Credit
42,000
178,000
90,000
240,000
<u> 520,000</u>
<u>550,000 520,000</u>
30,000
Explanation:
For labor and raw materials we will assign the direct cost as part of Work In Process inventory. The indirect part will be post Overhead.
All this actual cost of overhead will be debited. When doing the applied overhead we credited so the difference will tell us the over or underapplied overhead.
Applied overhead calculation:
30,000 machine hours x $8 per hour = $240,000
Then we transfer the finished goods from WIP into finished goods inventory.
The sales price will be 480,000 x (1 + 25% markup) = 600,000
For the T-accounts we will post each value of the WIP and Overhead account. Then add each column and calculate the balance considering the 42,000 beginning inventory
