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Entries for Direct Labor and Factory Overhead Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses a...

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Accounting

Entries for Direct Labor and Factory Overhead

Schumacher Industries Inc. manufactures recreational vehicles.Schumacher Industries uses a job order cost system. The timetickets from June jobs are summarized as follows:

Job 11-101$2,240
Job 11-1021,520
Job 11-1031,200
Job 11-1041,830
Job 11-1051,200
Factory supervision1,040

Factory overhead is applied to jobs on the basis of apredetermined overhead rate of $30 per direct labor hour. Thedirect labor rate is $17 per hour.

a. Journalize the entry to record the factorylabor costs. If an amount box does not require an entry, leave itblank.

Work in Process
Factory Overhead
Wages Payable

b. Journalize the entry to apply factoryoverhead to production for June. If an amount box does not requirean entry, leave it blank.

Work in Process
Factory Overhead  

Answer & Explanation Solved by verified expert
4.1 Ratings (841 Votes)

Journal Entry
Account Titles Debit Credit
a) Work in Process Inventory ($17,680 + $135,830) $153,510
   Factory Overheads $17,680
   Wages Payable $135,830
(To record the allocation of factory labor costs)
Journal Entry
Account Titles Debit Credit
b) Work in Process $270,900
   Factory Overheads $270,900
(To record the application of factory overheads to jobs)
Working notes:
Direct labor costs: Hours (a) Rate (b) Total Cost (a*b)
Job 11-101 2,240 $17 $38,080
Job 11-101 1,520 $17 $25,840
Job 11-101 1,200 $17 $20,400
Job 11-101 1,830 $17 $31,110
Job 11-101 1,200 $17 $20,400
Total direct labor costs $135,830
Factory supervison 1,040 $17 $17,680
Factory Overhead Costs Hours (a) Rate (b) Total Cost (a*b)
Job 11-101 2,240 $30 $67,200
Job 11-101 1,520 $30 $45,600
Job 11-101 1,200 $30 $36,000
Job 11-101 1,830 $30 $54,900
Job 11-101 1,200 $30 $36,000
Factory supervison 1,040 $30 $31,200
Total factory overheads applied $270,900
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