Widmer Watercraft’s predetermined overhead rate is 200% of direct labor. Information on the company’s production activities during May follows. Purchased raw materials on credit, $220,000. Materials requisitions record use of the following materials for the month. Job 136 $ 49,500 Job 137 33,500 Job 138 19,200 Job 139 22,800 Job 140 6,800 Total direct materials 131,800 Indirect materials 20,500 Total materials used $ 152,300 Paid $15,000 cash to a computer consultant to reprogram factory equipment. Time tickets record use of the following labor for the month. These wages were paid in cash.

Job order costing refer to the process of determining the expenses involved in the processing or production of a particular product or a particular department of product. Preparing the T accounts as follows: Raw material Inventory Accounts payable $220,000 Work in process 131,800 Factory Overhead 20,500 End balance $67,700 Factory Overhead Raw material inventory $20,500 Cash $15,000 Work in process inventory(12,200+38,100+39,000)×200%) $178,600 Cash $25,000 Work in process inventory $28,800 Depreciation and taxes (68,500+38,000+11,000+35,000) $152,500 End balance $5,600 Work in process inventory Raw material inventory $131,800 Finished goods inventory(86,100+133,500+139,800) $359,400 Cash $103,700 Factory overhead $28,800 Factory overhead $178,600 End balance $25,900 Finished goods inventory Work in process inventory $359,400 COGS (86,100+133,500) $219,600 End balance $139,800 Cost of goods sold Finished goods inventory $219,600 End balance $219,600 Working note: Preparing the job order costing: Particulars 136 137 138 139 140 Materials 49,00 33,500 19,200 22,800 6,800 Labor 12,200 10,600 38,100 39,000 3,800 Overhead (200% OF DL) 24,200 21,200 76,200 78,000 7,600 Total cost $86,100 $65,300 $133,500 $139,800 $18,200

Answered: Widmer Watercraft’s predetermined overhead rate is 200% of direct labor. Information on the company’s production activities during May follows. Purchased raw…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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Problem 19-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3

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Widmer Watercraft’s predetermined overhead rate is 200% of direct labor. Information on the company’s production activities during May follows.

Purchased raw materials on credit, $220,000.
Materials requisitions record use of the following materials for the month.


Job 136	$	49,500
Job 137		33,500
Job 138		19,200
Job 139		22,800
Job 140		6,800
Total direct materials		131,800
Indirect materials		20,500
Total materials used	$	152,300

Paid $15,000 cash to a computer consultant to reprogram factory equipment.
Time tickets record use of the following labor for the month. These wages were paid in cash.


Job 136	$	12,200
Job 137		10,600
Job 138		38,100
Job 139		39,000
Job 140		3,800
Total direct labor		103,700
Indirect labor		25,000
Total	$	128,700

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 $525,000.
The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).


Depreciation of factory building	$	68,500
Depreciation of factory equipment		38,000
Expired factory insurance		11,000
Accrued property taxes payable		35,000

Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.