Question

Warner Company purchases $50,100 of raw materials on account, and it incurs $61,000 of factory labor costs. Supporting records show that (a) the Assembly Department used $24,100 of the raw materials and $36,000 of the factory labor, and (b) the Finishing Department used the remainder. Manufacturing overhead is assigned to departments on the basis of 160% of labor costs.

Journalize the assignment of overhead to the Assembly and Finishing Departments.
Account Titles and Explanation Debit Credit

Answer 1

Date Account Titles and Explanation Debit Credit

WIP - Assembly department $57,600

WIP - Finishing department $40,000

Manufacturing overhead $97,600

(To assign overheads to assembly and finishing department)

Step-by-step explanation:

Labor cost assigned to assembly = $36,000

Labor cost assigned to finishing = $61,000 - $36,000 = $25000

Manufacturing cost assigned to assembly = $36,000 *160% = $57600

Manufacturing cost assigned to finishing = $25000 * 160% = $40000