Question

Entries for Direct Labor and Factory Overhead

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

Job 201	$3,990
Job 202	2,000
Job 203	1,580
Job 204	2,930
Factory supervision	1,370

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $20 per direct labor hour. The direct labor rate is $14 per hour.

If required, round final answers to the nearest dollar.

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

b. Journalize the entry to apply factory overhead to production for November.

Answer 1

Date / No.	Accounts Titles and Explanations	Debit (in $ )	Credit (in $ )
(a)	Work in Process ( $ 3,990 + $ 2,000 + $ 1,580 + $ 2,930)	$ 10,500
	Factory Overhead	$ 1,370
	Wages Payable   - Bal. Fig.		$ 11,870
	( To record the factory labor costs)
(b)	Work in Process ( $ 10,500 x $ 20 / $ 14)	$ 15,000
	Factory Overhead		$ 15,000
	( To record the factory overhead applied to production)