Required information
[The following information applies to the questionsdisplayed below.]
Widmer Watercraft’s predetermined overhead rate for the year 2017is 200% of direct labor. Information on the company’s productionactivities during May 2017 follows.
- Purchased raw materials on credit, $200,000.
- Materials requisitions record use of the following materialsfor the month.
| | | |
| Job 136 | $ | 48,500 | |
| Job 137 | | 33,500 | |
| Job 138 | | 19,400 | |
| Job 139 | | 23,400 | |
| Job 140 | | 7,200 | |
| Total direct materials | | 132,000 | |
| Indirect materials | | 19,500 | |
| Total materials used | $ | 151,500 | |
|
- Paid $15,750 cash to a computer consultant to reprogram factoryequipment.
- Time tickets record use of the following labor for the month.These wages were paid in cash.
| | | |
| Job 136 | $ | 12,100 | |
| Job 137 | | 10,600 | |
| Job 138 | | 37,700 | |
| Job 139 | | 39,000 | |
| Job 140 | | 3,400 | |
| Total direct labor | | 102,800 | |
| Indirect labor | | 25,500 | |
| Total | $ | 128,300 | |
|
- Applied overhead to Jobs 136, 138, and 139.
- Transferred Jobs 136, 138, and 139 to Finished Goods.
- Sold Jobs 136 and 138 on credit at a total price of$530,000.
- The company incurred the following overhead costs during themonth (credit Prepaid Insurance for expired factoryinsurance).
| | | |
| Depreciation of factory building | $ | 69,500 | |
| Depreciation of factory equipment | | 37,000 | |
| Expired factory insurance | | 11,000 | |
| Accrued property taxes payable | | 36,500 | |
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- Applied overhead at month-end to the Work in Process Inventoryaccount (Jobs 137 and 140) using the predetermined overhead rate of200% of direct labor cost.
1. Prepare journal entries to record the events andtransactions a through i.
