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16 June, 19:56

Munson Co. uses a job order cost system. The following data summarize the operations related Obj. 2 to production for July:A. Materials purchased on account, $225,750. B. Materials requisitioned $217,600, of which $17,600 was for general factory use. C. Factory labor used $680,000, of which $72,300 was indirect. D. Other costs incurred on account for factory overhead, $330,000; selling expenses, $180,000; and administrative expenses, $126,000. E. Prepaid expenses expired for factory overhead were $27,500; for selling expenses, $8,100; and for administrative expenses, $5,250. F. Depreciation of office building was $44,500; of office equipment, $16,800; and of factory equipment, $55,100. G. Factory overhead costs applied to jobs, $548,000. H. Jobs completed $1,140,000. I. Cost of goods sold, $1,128,000. Instructions:Journalize the entries to record the summarized operations.

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  1. 16 June, 20:09
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    raw materials inventory 225,750

    account payable 225,750

    to record purchase of materials

    WIP 217,600 debit

    factory overhead 17,600 debit

    raw materials 225,750 credir

    to record use of materials

    WIP 606,700 debit

    factory overhead 72,300 debit

    wages payable 680,000

    to record wages for the period

    factory overhead 330,000

    selling expense 180,000

    administrative expense 126,000

    account payable 636,000

    to record other expenses on account

    factory overhead 27,500

    selling expense 8, 100

    adm expense 5, 250

    prepaid expenses 40,850

    to record expired prepaid

    factory overhead 55,100

    depreciation expense 61,300

    acc depreciation factory equipmnet 55,100

    acc depreciation office equipment 16,800

    acc depreciation building 44,500

    to record depreciation for the period

    WIP 548,000

    factory overhead 548,000

    to record applied overhead

    Finished Goods 1,140,000

    WIP 1,140,000

    to record jobs completed

    COGS 1,128,000

    Finished Goods 1,128,000

    to record COGS

    Factory Overhead 45,500 debit

    COGS 45,500 credit

    to record adjustment for overapplied factory overhead

    Explanation:

    For each entry we will make sure to make the difference between capitalized cost (factory overhead labor and materials) and cost for the period (selling and administrative expenses)

    Then we will do the adjustment for hte overhead

    adjustment for overhead:

    actual overhead:

    17,600 indirect materials

    72,300 indirect labor

    330,000 other expenses

    27,500 expired prepaid

    55,100 depreciation equipment

    502,500 actual overhead

    548,000 applied overhead

    The actual cost were lower than expected, we charge more cost on the goods than we should, so we adjust and decrease the Cost of Goods Sold.

    adjusment for overapplied overhead: 45,500
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