Question

Kimberlee Corporation manufactures custom cabinets for kitchens. It uses a normal costing system with two direct costing categories- direct materials and direct manufacturing labor-- and one indirect cost pool, manufacturing overhead costs. It provides the following informtion for April 2017.

Actual direct materials used      $75,000

Actual direct manufacturing labor costs paid in cash $55,000

Indirect materials used   $3,500

Supervision and engineering salaries paid in cash $49,000

Plant utilities and repairs paid in cash $13,000

Plant Depreciation $11,000

Actual direct manufacturing labor-hours 3100 hours

Cost of individual jobs completed and transferred to finished goods   $190,000

Cost of Good Sold    $145,000

Budgeted manufacturing overhead costs    $1,302,000

Budgeted direct manufacturing labor-hours 31,000 hours

Present journal entries a) usage of direct and indirect materials, b) manufacturing labor incurred,C) manufacturing overhead costs incurred, d) allocation of manufacturing overhead costs to jobs, e) cost of jobs completed and transferred to finished goods, and f) cost of goods sold (assume the cost allocation base is direct labor hours)

Answer 1

a. Debit Work in Process A/c $ 75000

Debit Factory Overhead A/c $ 3500

Credit Direct Material A/c $ 75000

Credit Indirect Material A/c $ 3500

b. Debit Work in Process A/c $ 55000

Credit Wages payable A/c $ 55000

(Wages incurred)

c. Debit Manufacturing Overhead A/c $ 76500

Credit Indirect material A/c $ 3500

Credit Supervision and engineering salaries $ 49000

Credit Plant utilities and repairs $ 13000

Credit Depreciation $ 11000

D. Debit Work in Process A/c $ 130200

Credit Manufacturing OH A/c $ 130200

E. Debit Finished Good A/c $ 190000

Credit Work in Process A/c $ 190000

f. Debit COGS A/c $ 145000

Credit Finished Goods A/c $ 145000