Southworth Company uses a job order costing system and applies manufacturing overhead cost to jobs on the bases of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $252,800 of manufacturing overhead for an estimated allocation base of $158,000 direct materials dollars.
The following transactions took place during the year:
A. Raw materials purchased, $148,000
B. Raw materials requisitioned for use in production (all direct materials) $143,000
C. Utility bills incurred in the factory, $24,000
D. Cost for salaries and wages were incurred as follows:
Direct Labor $219,000
Indirect Labor $ 78,800
Selling and administrative salaries $140,000
E. Maintenance costs incurred in the factory, $24,000
F. Advertising costs incurred, $122,000
G. Depreciation recorded for the year, $49,000 (70% relates to factory assets, and the remainder relates to selling and administrative assets).
H. Rental cost incurred on buildings, $89,800 (80% of the space is occuped by the factory, and 20% is occupied by sales and administration).
I. Miscellaneous selling and administrative costs incurred, $14,999
J. Manufacturing overhead cost was applied to jobs, ???
K. Cost of goods manufactured for the year, $559,000
L. Sales for the year (on all account) totaled $1,200,000. These goods cost $540,000 according to their job cost sheets.
The balance in the inventory accounts at the beginning of the year were as follows:
Raw Materials $19,000
Work in Process $24,000
Finished Goods $35,000
1. Prepare journal entries to record the above data. (Can't seem to figure out J)
2. Post your entried to T-accounts Determine the ending balance in the inventory accounts and in the Manufacturing Overhead account.
3. Prepare a schedule of cost of goods manufactured.
4. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Prepare a schedule of cost of goods sold.
5. Prepare an income statement for the year.
6. Job 218 was one of the many jobs started and completed during the year. The job required 3,300 in direct materials and 400 hours of diret labor time at a rate of $13 per hour. If the job contained 510 units and the company billed at 80% above the unit product on the job cost sheet, what price per unit would have been charged to the customer?