Question

Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows:

Job 201 $4,280
Job 202 2,140
Job 203 1,690
Job 204 3,140

Factory supervision 1,460 Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $22 per direct labor hour. The direct labor rate is $15 per hour. If required, round final answers to the nearest dollar.

Required:
a. Journalize the entry to record the factory labor costs.
b. Journalize the entry to apply factory overhead to production for November.

Answer 1

Part a.

Work In Process : Job 201 $64,200 (debit)

Work In Process : Job 202 $32,100 (debit)

Work In Process : Job 203 $25,350 (debit)

Work In Process : Job 204 $47,100 (debit)

Salaries Payable $168,750 (credit)

Part b.

Work In Process : Job 201 $94,160 (debit)

Work In Process : Job 202 $47,080 (debit)

Work In Process : Job 203 $37,180 (debit)

Work In Process : Job 204 $69,080 (debit)

Overheads $168,750 (credit)

Step-by-step explanation:

Calculation of Labor Cost :

Job 201 = 4,280 hours × $15 = $64,200

Job 202 = 2,140 hours × $15 = $32,100

Job 203 = 1,690 hours × $15 = $25,350

Job 204 = 3,140 hours × $15 = $47,100

Application of overhead to jobs :

Job 201 = 4,280 hours × $22 = $94,160

Job 202 = 2,140 hours × $22 = $47,080

Job 203 = 1,690 hours × $22 = $37,180

Job 204 = 3,140 hours × $22 = $69,080