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	$2,550
Job 202	1,280
Job 203	1,010
Job 204	1,880
Factory supervision	870

Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $28 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

Account Titles	Debit	Credit
Work in Process	$                  6,720
Manufacturing Overhead	$                      870
Factory Payroll		$                  7,590
(To record factory labor costs)
Work in Process	$                13,440
Manufacturing Overhead		$                13,440
(To apply factory overhead)