Question

I. Journalize the following transactions: 1. Madison Co. purchased $225,500 of raw materials on account. 2. Actual manufacturing overhead costs include: a. Utilities : $2,800 b. Depreciation on equipment: $12,650 c. Repairs on account: $3,200 d. Rent paid, $6,000 e. Insurance (prepaid policy): $3,350 3. Madison Co. issued $75,500 of material to Process A. 4. Assigned $18,000 is factory labor, of which $12,000 is indirect labor 5. Manufacturing Overhead costs are applied at 82% of material issued 6. Balance in WIP – A is transferred to Process –B 7. $51,000 of material is issued to Process – B 8. Assigned $22,000 of factory labor, of which $15,000 is indirect labor 9. Manufacturing overhead costs are applied to Process B at a rate of 62.5% of material issued (to process B) 10. Actual manufacturing overhead costs paid totaled $39,500; manufacturing overhead costs charged to accounts payable totaled $1,500 11. Balance of Process B is transferred to Finished Goods 12. The cost transferred to finished goods included 62,500 units. Calculate the cost per unit (round to hundredths); Madison Co. sold 13,250 units for $79,000 cash; they sold 4,125 units for $24,500 on account 13. Determine over or under-applied manufacturing overhead and prepare adjusting entry.

Answer 1

Answer and Explanation:

Dr raw materials 225000

Cr accounts payable 225000

Dr wages 40000

Cr materials 40000

Dr manufacturing overhead 28000

Cr cash 2800

Cr accumulated depreciation 12650

Cr rent 3200

Cr repairs 6000

Cr prepaid insurance 3350

Work in progress A Dr 75500

Raw material Cr 75500

Work in progress A Dr 6000

Manufacturing overhead Dr 12000

Wages Cr 18000

Work in progress A Dr 61910

Manufacturing overhead cr 61910

cash dr 79500

account receivable dr 24500

Sales cr 104000

cost of goods Dr 64853

Finished goods Cr 64853

Manufacturing overhead Dr 9785

Cost of goods sold Cr 9785

Note

Work in progress A to overhead calculated 82% of 79500=61910