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[The following information applies to the questions displayed below.] Widmer Watercraft’s predetermined overhead rate for the year...

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[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.

  1. Purchased raw materials on credit, $200,000.
  2. Materials requisitions record use of the following materialsfor the month.
Job 136$48,500
Job 13733,500
Job 13819,400
Job 13923,400
Job 1407,200
Total direct materials

132,000

Indirect materials19,500
Total materials used$151,500
  1. Paid $15,750 cash to a computer consultant to reprogram factoryequipment.
  2. Time tickets record use of the following labor for the month.These wages were paid in cash.
Job 136$12,100
Job 13710,600
Job 13837,700
Job 13939,000
Job 1403,400
Total direct labor102,800
Indirect labor25,500
Total$128,300
  1. Applied overhead to Jobs 136, 138, and 139.
  2. Transferred Jobs 136, 138, and 139 to Finished Goods.
  3. Sold Jobs 136 and 138 on credit at a total price of$530,000.
  4. The company incurred the following overhead costs during themonth (credit Prepaid Insurance for expired factoryinsurance).
Depreciation of factory building$69,500
Depreciation of factory equipment37,000
Expired factory insurance11,000
Accrued property taxes payable36,500
  1. 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.

3. Post the journal entries for thetransactions to the following T-accounts, each of which started themonth with a zero balance.

Answer & Explanation Solved by verified expert
4.4 Ratings (758 Votes)

job 136 job 137 job138 job139 job140 total
Materials 48,500 33,500 19,400 23,400 7,200 132,000
labor 12,100 10,600 37,700 39,000 3,400 102,800
overhead 24,200 21200 75400 78000 6800 205,600
total 84,800 65,300 132,500 140,400 17,400 440,400
2) TR General Journal Debit Credit
a) Raw materials inventory 200,000
Accounts payable 200,000
b) Work in process inventory 132,000
Factory overhead 19,500
Raw materials inventoy 151,500
c) Factory overhead 15,750
cash 15,750
d) Work in process inventory 102,800
Factory overhead 25,500
Cash 128,300
e) Work in process overhead 177,600
Factory overhead 177,600
f) finished goods inventory 357,700
Work in process inventory 357,700
g) Accounts receivable 530,000
Sales 530,000
cost of goods sold 217,300
finished goods inventory 217,300
h) Factory overhead 154,000
Accumulated depreciation-factory building 69,500
Accumulated depreciation-factory equipment 37,000
prepaid insurance 11,000
property taxes payable 36,500
i) work in process inventory 28,000
Factory overhead 28,000
T- Accounts
Raw materials inventory Work in process inventory
a. 200,000 b. 132,000
151,500 b. d. 102,800
e. 177,600
end bal 48,500 357,700 f.
i. 28000
bal 82,700
Factory overhead finished goods inventory
b. 19,500 f. 357,700
c. 15,750 217,300 g.
d. 25,500 bal 140,400
177,600 e.
h. 154,000
28,000 i
bal 9,150
cost of goods sold
g. 217,300
end bal 217,300
Report of Job costs
Work in process inventory
job 137 65,300
job 140 17,400
Balance 82,700
finished goods inventory
job 139 140,400
Balance 140,400
cost of goods sold
job 136 84,800
job 138 132,500
balance 217,300

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