Question

Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:
Job 201 $4,850
Job 202 2,420
Job 203 1,910
Job 204 3,570
Factory supervision 1,660

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $28 per direct labor hour. The direct labor rate is $17 per hour. If required, round final answers to the nearest dollar.

a. Journalize the entry to record the factory labor costs.
b. Journalize the entry to apply factory overhead to production for November.

Answer 1

Answer and Explanation:

The journal entry is given below:

a. Work in process ($4,850 + $2,420 + $1,910 + $3,570) $12,750

Factory overhead $1,660

         To wages payable $14,410

(being the factory labor cost is recorded)

b. Work in process Dr ($12,750 ÷ $17 × $28) $21,000

          To factory overhead $21,000

(being the factory overhead is applied)

These two entries should be recorded for an individual parts