AmaZing company has its jobcosting system including two cate

AmaZing company has its job-costing system including two categories of direct costs: direct materials and direct manufacturing labor and one indirect-cost pool. Manufacturing overhead allocated at a budgeted $31 per machine-hour in 2016. The following data (in thousands) show operating costs for 2016.

Materials control, Jan 1, 2016                                                                        20

WIP Control, Jan 1, 2016                                                                                 9

Finished Goods Control, Jan 1, 2016                                                               10

Finished Goods Control, Dec 31, 2016                                                           11

Materials and Supplies purchased on credit                                                   154

Direct materials used                                                                                       145

Indirect materials issued to various production departments                        19

Direct manufacturing labor                                                                             100

Indirect manufacturing labor by various production departments                43

Depreciation on plant                                                                                     28

Miscellaneous manufacturing overhead (utilities..)                                       13

Cost of goods sold                                                                                            294

Manufacturing overhead allocated 3,000 machine-hours

1. Calculate Materials control on Dec 31, 2016                    

2. Prepare journal entries. What is the cost of goods manufactured?

3. Calculate the amount of under- or overallocated manufacturing overhead

Solution

Answer 1. Material Control Beg. Bal.            20.00      145.00 2 1          154.00         19.00 3 End. Bal.            10.00 Answer 2. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1 Material Control      154.00    Accounts Payable Control      154.00 (To record the raw material purchased) 2 WIP Control      145.00    Material Control      145.00 (To record the material issued for production) 3 Manufacturing Overhead Control         19.00    Material Control         19.00 (To record the indirect material used) 4 WIP Control      100.00 Manufacturing Overhead Control         43.00 Wages Payable Control      143.00 (to record the labor used) 5 Manufacturing Overhead Control         28.00    Accumulated Depreciation - Plant & Equip.         28.00 (To record the depreciation on plant) 6 Manufacturing Overhead Control         13.00    Various Liabilities         13.00 (to record the misc. manufacturing overhead) 7 WIP Control         93.00 Manufacturing Overhead Allocated         93.00 (To record the manufacturing overhead applied) Manufacturing Overhead Allocated = 3,000 mach Hrs x $31 Manufacturing Overhead Allocated = $93,000 8 Finished Goods Control      298.00    WIP Control      298.00 9 Accounts Receivable / Cash XXX     Sales Revenue XXX (To record the sales) Note - No Figures are Given 10 Cost of Goods Sold      294.00    Finished Goods Inventory      294.00 (To record the cost of goods sold) 11 Manfacturing Overhead Allocated         93.00 Cost of Goods Sold         10.00    Manufacturing Overhead Control      103.00 (To record the underallocated overhead) Statement of Cost of Goods Manufactured Direct Material Raw Material Inventory, Beginning                  20.00 Material Purchased                154.00 Total Direct Material Available for Prouction                174.00 Raw Material Inventory, Ending                (29.00) Cost of Direct Materials Used in Productions            145.00 Direct Labor            100.00 Manufacturing Overhead Applied              93.00 Total Manufacturing Costs            338.00 Add: WIP Inventory, Beginning                 9.00 Sub-total            347.00 Less: WIP Inventory, Ending            (48.00) Cost of Goods Manufactured            299.00 Answer 3. Actual Manufacturing Overhead                103.00 Applied MOH                  93.00 Underallocated Overhead                  10.00