In a perfectly competitive industry rev: 06_26_2018 Multiple Choice economic profits may exist in the long run but not in the sh
1 answer:
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Answer and Explanation:
Before recording the journal entries first we need to do the computations which are shown below:
The predetermined overhead rate is
= $420,000 ÷ 60,000 machine hours
= $7 per machine hour
Now
<u>Particulars Job 101 Job 102 Job 103 Total </u>
Direct materials used 19,200 14,400 9,600 43,200
Direct labor 28,800 11,200 9,600 49,600
overhead applied 7000 28000 14000 49000
total 55,000 53,600 33,200 141,800
COGS Finished WIP
Now the journal entries are as follows
1 Finished goods inventory $53,600
To Work in process inventory $53,600
(Being the transfer of job 102 is recorded)
2a) Cost of goods sold $55,000
To Finished goods inventory $55,000
(being the cost of goods sold is recorded)
2b) Cash $60,000
To sales revenue $60,000
(being the sales revenue is recorded)
3) Manufacturing overhead $4,000 ($49,000 - $45,000)
To Cost of goods sold $4,000
(Being the balance of the manufacturing overhead is recorded)
