Nottaway Flooring produces custom-made floor tiles. The company’s Raw Material Inventory account contains both direct and indirect materials. Until the end of April, the company worked solely on a large job (#4263) for a major client. Near the end of the month, Nottaway began Job #4264. The following information was obtained relating to April production operations. Raw material purchased on account, $408,000. Direct material issued to Job #4263 cost $327,600; indirect material issued for that job cost $24,920. Direct material costing $3,740 was issued to start production of Job #4264. Direct labor hours worked on Job #4263 were 3,600. Direct labor hours for Job #4264 were 120. All direct labor employees were paid $30 per hour. Other actual factory overhead costs incurred for the month totaled $137,400. This overhead consisted of $36,000 of supervisory salaries, $43,000 of depreciation charges, $14,400 of insurance, $25,000 of indirect labor, and $19,000 of utilities. Salaries, insurance, and utilities were paid in cash, and indirect labor charges were accrued.
Nottaway Flooring produces custom-made floor tiles. The company’s Raw Material Inventory account contains both direct and indirect materials. Until the end of April, the company worked solely on a large job (#4263) for a major client. Near the end of the month, Nottaway began Job #4264. The following information was obtained relating to April production operations. Raw material purchased on account, $408,000. Direct material issued to Job #4263 cost $327,600; indirect material issued for that job cost $24,920. Direct material costing $3,740 was issued to start production of Job #4264. Direct labor hours worked on Job #4263 were 3,600. Direct labor hours for Job #4264 were 120. All direct labor employees were paid $30 per hour. Other actual factory overhead costs incurred for the month totaled $137,400. This overhead consisted of $36,000 of supervisory salaries, $43,000 of depreciation charges, $14,400 of insurance, $25,000 of indirect labor, and $19,000 of utilities. Salaries, insurance, and utilities were paid in cash, and indirect labor charges were accrued.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Nottaway Flooring produces custom-made floor tiles. The company’s Raw Material Inventory account contains both direct and indirect materials. Until the end of April, the company worked solely on a large job (#4263) for a major client. Near the end of the month, Nottaway began Job #4264. The following information was obtained relating to April production operations.
- Raw material purchased on account, $408,000.
- Direct material issued to Job #4263 cost $327,600; indirect material issued for that
job cost $24,920. Direct material costing $3,740 was issued to start production of Job #4264. - Direct labor hours worked on Job #4263 were 3,600. Direct labor hours for Job #4264 were 120. All direct labor employees were paid $30 per hour.
- Other actual
factory overhead costs incurred for the month totaled $137,400. This overhead consisted of $36,000 of supervisory salaries, $43,000 ofdepreciation charges, $14,400 of insurance, $25,000 of indirect labor, and $19,000 of utilities. Salaries, insurance, and utilities were paid in cash, and indirect labor charges were accrued. - Overhead is applied to production at the rate of $36 per direct labor hour.
Beginning balances of Raw Material Inventory and Work in Process Inventory were, respectively, $8,600 and $22,800. Of the beginning WIP balance, $1,600 was related to Job #4263. Job #4263 was completed during April.
a. Prepare journal entries for Transactions 1–5.
Note: List any multiple debits or any multiple credits in alphabetical order by account name.
Account | Debit | Credit | |
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1 | Answer
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Answer
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Answer
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Answer
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To record raw materials purchased on account | |||
2 | Answer
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Answer
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Answer
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Answer
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Answer
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Answer
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To record the direct materials issued | |||
3 | Answer
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Answer
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Answer
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Answer
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Answer
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Answer
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Answer
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Answer
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Answer
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To record the labor costs | |||
4 | Answer
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Answer
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Answer
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To record actual overhead costs | |||
5 | Answer
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To record the application of OH |
b. Determine the balance in Raw Material Inventory at the end of the month. $Answer
c. Determine the balance in Work in Process Inventory at the end of the month. $Answer
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