Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appears in the company’s Work in Process Inventory account for the month of June         Debits to account:       Balance, June 1 $ 5,000   Direct materials   18,000   Direct labor   12,000   Manufacturing overhead (applied to jobs as 125% of direct labor cost)   15,000   Total debits to account $ 50,000   Credits to account:       Transferred to Finished Goods Inventory account   44,000   Balance, June 30 $ 6,000     a. Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $1,600, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30. b. Prepare general journal entries to summarize: 1. The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June. 2. The transfer of production completed during June to the Finished Goods Inventory account. 3. The cash sale of 80 percent of the merchandise completed during June at a total sales price of $50,000. Show the related cost of goods sold in a separate journal ent

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appears in the company’s Work in Process Inventory account for the month of June

       
Debits to account:      
Balance, June 1 $ 5,000  
Direct materials   18,000  
Direct labor   12,000  
Manufacturing overhead (applied to jobs as 125% of direct labor cost)   15,000  
Total debits to account $ 50,000  
Credits to account:      
Transferred to Finished Goods Inventory account   44,000  
Balance, June 30 $ 6,000  
 

a. Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $1,600, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30.

b. Prepare general journal entries to summarize:

1. The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June.

2. The transfer of production completed during June to the Finished Goods Inventory account.

3. The cash sale of 80 percent of the merchandise completed during June at a total sales price of $50,000. Show the related cost of goods sold in a separate journal ent

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