Problem: Stanley Printing Company began operation in March with three custom orders. The following costs were incurred during the month.
Direct Materials: Direct Labor:
Job A1 $950 Job A1 $ 2,450
Job A2 750 Job A2 1,950
Job A3 500 Job A3 900
Manufacturing Overhead:
Applied at the rate of 110% of direct labor dollars Actual Manufacturing Overhead incurred: $6,100
Jobs A1 and A2 were completed and sold during March. Job A3 was incomplete at the end of the month. Selling prices were as follows: Job A1, $9,400, and Job A2, $6,900.
Q1. Record the entries for all costs and revenues in T accounts.
Q2. Verify the ending balance in the Work in Process Inventory account.
Q3. Determine the amount of underapplied manufacturing overhead for March and transfer it to Cost of Goods Sold.