Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appears in the company's Work in Process Inventory account for the month of June:
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|
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| Debits to account: |
|
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| Balance, June 1 |
$ |
5,000 |
| Direct materials |
|
19,000 |
| Direct labor |
|
12,400 |
| Manufacturing overhead (applied to jobs as 125% of direct labor cost) |
|
15,500 |
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|
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| Total debits to account |
$ |
51,900 |
| Credits to account: |
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|
| Transferred to Finished Goods Inventory account |
|
44,000 |
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|
|
| Balance, June 30 |
$ |
7,900
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Instructions
| a. |
Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $1,500, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30.
| b. |
Prepare general journal entries to summarize: |
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1. |
The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June.
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2. |
The transfer of production completed during June to the Finished Goods Inventory account.
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3. |
The cash sale of 80 percent of the merchandise completed during June at a total sales price of $52,000. Show the related cost of goods sold in a separate journal entry. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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