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Chapter 17: 24E-b (page 945)

Question: Journalize the following transactions for Marge鈥檚 Sofas. Explanations are not required.

b. Incurred manufacturing wages of $15,000, 75% of which was direct labor and

25% of which was indirect labor.

Short Answer

Expert verified

Date

Particulars

Debit ($)

Credit ($)

Work-in-process inventory (75% of $15,000)

11,250

Manufacturing overhead (25% of $15,000)

3,750

Wages payable

15,000

Step by step solution

01

Step-by-Step Solution:Step 1: Wages payable

Wages payable is defined as the current liability of the company which shows the amount due to employees but not paid during the year.

02

Recording of direct or indirect labor expenses in the books of the company

The labor wages incurred by the company is recorded in the books by debiting the direct labor cost as work in process, indirect labor cost as manufacturing overhead and crediting the wages payable account.

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Most popular questions from this chapter

Lincoln Company completed jobs that cost \(38,000 to produce. In the same period,the company sold jobs for \)88,000 that cost $42,000 to produce. Prepare the journalentries for the completion and sales of the jobs. All sales are on account.

Selected cost data for Classic Print Co. are as follows:

Estimated manufacturing overhead cost for the year

$125,000

Estimated direct labor cost for the year

78,125

Actual manufacturing overhead cost for the year

116,000

Actual direct labor cost for the year

67,000

Requirements

2. Prepare the journal entry to allocate overhead costs for the year.

Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.

j. A governmental agency that takes bids for specific items it utilizes where each item requires a separate bid.

Question: Analyze the following T-accounts, and describe each lettered transaction. Note that some transactions may be compound entries.

Raw material inventory

(a)

(b)

Work in process inventory

(b)

(f)

(c )

(e )

Finished goods inventory

(f)

(g)

Prepaid insurance

(d)

Account payable

(a)

Wages payable

(c)

Manufacturing overhead

(b)

(e)

(c )

(h)

(d)

Cost of goods sold

(g)

(h)

Question: Using job order costing in a service company

Assume that Roth鈥檚 accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth鈥檚 estimated total indirect costs are $96,000 and the allocation base used is direct labor hours.

Requirements

2. What indirect costs will be allocated to Client 507 if Jack Smith, an accountant at Roth Accounting, works 15 hours to prepare the financial statements?
See all solutions

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