Answer:
a. The predetermined overhead rate for 2017,
=Total Manufacturing overhead costs / direct labor Costs
= $840,000/100,000= $ 1.2 / direct labor or 120% of direct labor cost.
b. Raw materials Inventory $ 90,000 Dr.
Accounts Payable $ 90,000 Cr.
To record the purchase of raw materials on account
Direct Labor $ 70,000 Dr.
Wages Payable $ 54,000 Cr
Payroll Taxes $ 16,000 Cr
To record factory labor costs incurred.
Indirect materials $ 17,000 Dr
Indirect labor $ 20,000 Dr
Depreciation expense $ 12,000 Dr
Other manufacturing costs $ 16,000 Dr
Manufacturing Overhead Control Account $ 65,000 Cr.
To record Manufacturing Overheads incurred.
c. Work In Process $ 189,000 Dr
Job 50 Raw materials $ 10,000 Cr
Job 51 Raw materials $ 39,000 Cr
Job 52 Raw materials $ 30,000 Cr
Job 50Direct Labor $ 5000 Cr
Job 51 Direct Labor $ 25000 Cr
Job 52 Direct Labor $ 20,000 Cr
Job 50 Manufacturing Overhead ( 1.2 * 5000) $ 6000Cr
Job 51 Manufacturing Overhead ( 1.2 * 25000) $ 30,000Cr
Job 52 Manufacturing Overhead ( 1.2 * 20,000) $ 24,000Cr
To record the materials, direct labor and manufacturing costs to Job 50,51 and 52. It can be summarized as follows
Work In Process $ 189,000 Dr
Raw materials $ 79,000 Cr
Direct Labor $ 50000 Cr
Manufacturing Overhead ( 1.2 * 50000) $ 60000Cr
