Question

Entries for Direct Labor and Factory Overhead

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

Job 11-101	$3,450
Job 11-102	2,340
Job 11-103	1,850
Job 11-104	2,830
Job 11-105	1,850
Factory supervision	1,600

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $30 per direct labor hour. The direct labor rate is $14 per hour.

a. Journalize the entry to record the factory labor costs. If an amount box does not require an entry, leave it blank.

	Work in Process
	Factory Overhead
	Wages Payable

Feedback

a. Increase the work in process for the direct labor and factory overhead for the indirect labor.

b. Journalize the entry to apply factory overhead to production for June. If an amount box does not require an entry, leave it blank.

	Work in Process
	Factory Overhead

Answer 1

Answer
a
General Journal	Debit	Credi
Work in Process	$      12,320		3450+2340+1850+2830+1850
Factory Overhead	$        1,600
Wages Payable		$      13,920
b
Work in Process	$      26,400
Factory Overhead		$      26,400
Workings:
Total direct labor cost	$      12,320
Divide by Direct labor rate	14
Direct labor hours	880		12320/14
X Predetermined overhead rate	30
Factory overhead applied	$      26,400		880*30