Problem:
McEllen Company uses job order costing. Manufacturing overhead is applied to production at a predetermined rate of 150% of direct labor cost. Additional information is available as follows:
- Job 201 was the only job in process at January 31, 2014, with accumulated costs as follow:
|
Direct materials
|
$4,000
|
|
Direct labor
|
2000,
|
|
Manufacturing overhead
|
3 000
|
|
$9.000
|
- Jobs 202, 203, and 204 were started during February.
- Direct materials requisitioned for February totaled $26,000.
- Direct labor cost of $20,000 was incurred for February.
- Actual manufacturing overhead was $32,000 for February.
- The only job still in process at February 28, 2014, was Job 204, with costs of $2,800 for direct materials and $1,800 for direct labor.
Instructions
(a) Make the journal entry to record materials used.
(b) Make the journal entry to assign factory labor to production.
(c) Make the journal entry to assign overhead to jobs.
(d) Make a combined journal entry to record the completion of Jobs No. 201, 202, and 203.
(e) Prove the agreement of Work in Process Inventory with the costs of Job 204.