1 The following account appears in the ledger after only par

1. The following account appears in the ledger after only part of the postings have been completed for March, the first month of the current fiscal year: Balance, MarchI Direct materials Direct labor Work in Process 182,000 147,000 175,000 Factory overhead is applied to jobs at the rate of 50% of direct labor cost. The actual factory overhead incurred for March was $96,000. Jobs completed during the month totaled $460,000. Prepare the journal entries to record (1) the application of factory overhead to production during March and (2) the jobs completed during March. (a) (b) (c) (d) The Forging Department accepted Job 507 on May 15th to make 1,000 widgets. To complete the job they requisitioned 1,100 sheets at $3.25 per sheet and 1,150 grommets at $0.44 per set. What is the balance of the factory overhead account on March 31? Was factory overhead overapplied or underapplied on March 31? Determine the cost of the unfinished jobs on March 31. 2. The cost driver that the Forging Department uses is drop-forge strokes which are counted on a machine mounted counter. $3.75 is applied as overhead for each drop-forge stroke. Additionally $600.00 of overhead is applied to each job due to setup and teardown. Direct labor is applied at $28.00 per hour for the machine operator and $19.00 for the machine loader. The job required 17 hours of labor by the team. When the job was complete Job 507 was transferred to Finished Goods Inventory (FGID). When the job was transferred, 45 sheets were returned unused to raw material inventory, 85 grommet sets were returned, and there were 2,115 strokes on the counter. Journalize all events depicted as of May 15th.

Solution

Soution : Only first question cab be answered as per Chegg policy

1. Journal Entries ( All amounts in $)

(a)Application of factory overhead is always done on the basis of standard costing. In this case, factory overhead would be apportioned to work in progress based on 50% of direct labour.

Date : 3/31 ( last working day of the month)

Work in process A/c .... Dr 87,500 ( 50 % of 175,000)

To Factory overhead A/c ( Being foctory overhead allocated to work in process)

It is provided that jobs worth 460,000 have been completed and need to be transfered to fininshed good inventory

Finished goods inventory A/c .... Dr 460,000

To work in process A/c ( being completed work from the production transfered to finished goods since it would be available for sale now)

(b) the balance of Factory overhead is 8,500 as per the below ledger since 96,000 was actually incurred during the month

(c) The factory overhead was underapplied in March to the work in process A/c since only 87500 was applied when compared to the actual 96,000.

(d) The Closing balance in work in process A/c represents the cost of unfinished jobs which is 131,500

Dr	Work in Process A/c	Cr
Opening Balance	182,000
Direct Materials	147,000	Job completed	460,000
Direct Labour	175,000	(transferred to Finished goods)
Factory overhead allocated	87,500	Closing balance	131,500
Total	591,500	Total	591,500
Dr	Factory overhead A/c	Cr
Payment made	96,000	Applied to Work in process	87,500
(provided paid during the month)
		Balance	8,500
Total	96,000	Total	96,000