1- The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are $8,000. The fringe benefits to be paid by the employer on this payroll are $6,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor.
Instructions:
(a) Prepare the entry to record the factory labor costs for the month of January.
(b) Prepare the entry to assign factory labor to production.
2- Torre Corporation incurred the following transactions.
1. Purchased raw materials on account $46,300
2. Raw materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials.
3. Factory labor costs incurred were $55,900 of which $51,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable.
4. Time tickets indicated that $50,000 was direct labor and $5,900 was indirect labor.
5. Manufacturing overhead costs incurred on account were $80,500.
6. Depreciation on the company's offcie building was $8,100.
7. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
8. Goods costing $88,000 were completed and transferred to finished goods.
9. Finished goods costing $75,000 to manufacture were sold on account for $103,000.
Instructions:
Journalize the transactions (Omit explanations)