Question

Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses a job order cost system. The time...

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 $5,140
Job 11-102 6,020
Job 11-103 4,120
Job 11-104 8,205
Job 11-105 18,270
Factory supervision 2,885

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $27 per direct labor hour. The direct labor rate is $55 per hour.

Required:

a. Journalize the June 30 entry to record the factory labor costs.*
b. Journalize a second entry on June 30 to apply factory overhead to production for June. Round your intermediate calculation to nearest whole number.*

*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

CHART OF ACCOUNTS
Schumacher Industries Inc.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable
125 Notes Receivable
126 Interest Receivable
131 Materials
132 Work in Process
133 Factory Overhead
134 Finished Goods
141 Supplies
142 Prepaid Insurance
143 Prepaid Expenses
181 Land
191 Factory
192 Accumulated Depreciation-Factory
LIABILITIES
210 Accounts Payable
221 Utilities Payable
231 Notes Payable
236 Interest Payable
241 Lease Payable
251 Wages Payable
252 Consultant Fees Payable
EQUITY
311 Common Stock
340 Retained Earnings
351 Dividends
390 Income Summary
REVENUE
410 Sales
610 Interest Revenue
a. Journalize the June 30 entry to record the factory labor costs.*
b. Journalize a second entry on June 30 to apply factory overhead to production for June. Round your intermediate calculation to nearest whole number.*
*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

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2

3

4

5

Homework Answers

Answer #1
Date Description Debit Credit Assets Liabilities Equity
June 30 Work in Process 41755
Factory Overhead 2885
    Wages Payable 44640
June 30 Work in Process 20493
       Factory Overhead 20493
Workings:
Job 11-101 5140
Job 11-102 6020
Job 11-103 4120
Job 11-104 8205
Job 11-105 18270
Total direct labor costs 41755
Total direct labor hours 759 =41755/55
Factory Overhead applied 20493 =759*27
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