Project #3689 - Fundamental Principles accounting

Westin Watercraft’s predetermined overhead rate for year 2011 is 200% of direct labor. Information on the company’s production activities during May 2011 follows.

  

a. Purchased raw materials on credit, $125,000.
b. Paid $84,000 cash for factory wages.
c. Paid $11,000 cash to a computer consultant to reprogram factory equipment.
d. Materials requisitions record use of the following materials for the month.

  

        
  Job 136 $ 30,000  
  Job 137   20,000  
  Job 138   12,000  
  Job 139   14,000  
  Job 140   4,000  
  

 
  Total direct materials   80,000  
  Indirect materials   12,000  
  

 
  Total materials used $ 92,000  
  



 

  

e. Time tickets record use of the following labor for the month.

  

        
  Job 136 $ 8,000  
  Job 137   7,000  
  Job 138   25,000  
  Job 139   26,000  
  Job 140   2,000  
 

 
  Total direct labor   68,000  
  Indirect labor   16,000  
  

 
  Total $ 84,000  
  



 

  

 f. Applied overhead to Jobs 136, 138, and 139.
 g. Transferred Jobs 136, 138, and 139 to Finished Goods.
 h. Sold Jobs 136 and 138 on credit at a total price of $340,000.
 i.

The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

  

        
  Depreciation of factory building $ 37,000  
  Depreciation of factory equipment   21,000  
  Expired factory insurance   7,000  
  Accrued property taxes payable   31,000  

  

 j.

Applied overhead at month-end to the Goods in Process (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Subject Business
Due By (Pacific Time) 03/28/2013 06:00 am
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