70.2K

Verified Solution

Link Copied!

Foley Company uses a job-order costing system. The following data relate to the month of October, the first month of the company%u2019s fiscal year:

a.	Raw materials purchased on account, $211,000.
b.	Raw materials issued to production, $191,000 (80% direct and 20% indirect).
c.	Direct labor cost incurred, $50,000; and indirect labor cost incurred, $22,000.
d.	Depreciation recorded on factory equipment, $106,000.
e.	Other manufacturing overhead costs incurred during October, $131,000 (credit accounts payable).
f.	The company applies manufacturing overhead cost to production on the basis of $4 per machine-hour. A total of 76,000 machine-hours were recorded for October.
g.	Production orders costing $515,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h.	Production orders that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 50% above cost.

Required:
1.	Prepare journal entries to record the information given above.

	General Journal	Debit	Credit
a.
b.
c.
d.
e.
f.
g.
h.

2.	Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000. (Record the transactions in the given order.)

Manufacturing Overhead

			End. Bal

Work in Process

Beg. Bal
End. Bal

Answer & Explanation Solved by verified expert

See Answer