Dexter Corporation, which uses a job costing system, had two jobs in process at the end of 20x0: job no. 59 (WIP balance = $90,000) and job no. 60 (WIP balance = $39,500). The following information is available:
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The company applies manufacturing overhead on the basis of machine hours. Budgeted overhead and machine activity for the year were anticipated to be $740,000 and 20,000 hours, respectively.
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The company worked on three jobs during the first quarter of 20x1. Direct materials used, direct labor incurred, and machine hours consumed were:
|
Job No.
|
Direct
Material
|
Direct Labor
|
Machine
Hours
|
|
59
|
$18,000
|
$45,000
|
900
|
|
60
|
----
|
25,000
|
600
|
|
61
|
37,000
|
35,000
|
1,200
|
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Manufacturing overhead during the first quarter included charges for depreciation ($17,000), indirect labor ($50,000), indirect materials used ($4,000), and other factory costs ($108,700) paid in cash.
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Dexter completed job no. 59 and job no. 60. Job no. 59 was sold for cash - $216,000.
Required:
A. Determine the company's predetermined overhead application rate.
B. Prepare journal entries as of March 31, 20x1 to record the following:
1. The issuance of direct material to production
2. Direct labor incurred.
3.The actual manufacturing overhead incurred during the quarter.
4. The application of manufacturing overhead to production. 5. The completion of job no. 59 and no. 60.
6. The sale of job no. 59 (two entries).