Alam Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the company's inventory balances were as follows:
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|
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| Raw materials |
$ |
25,400 |
| Work in process |
$ |
74,400 |
| Finished goods |
$ |
28,400 |
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The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 46,400 machine-hours and incur $185,600 in manufacturing overhead cost. The following transactions were recorded for the year:
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| a. |
Raw materials were purchased, $417,400. |
| b. |
Raw materials were requisitioned for use in production, $434,000 ($381,400 direct and $52,600 indirect). |
| c. |
The following employee costs were incurred: direct labor, $415,400; indirect labor, $61,400; and administrative salaries, $213,400. |
| d. |
Selling costs, $142,400. |
| e. |
Factory utility costs, $21,400. |
| f. |
Depreciation for the year was $83,800 of which $74,400 is related to factory operations and $9,400 is related to selling, general, and administrative activities. |
| g. |
Manufacturing overhead was applied to jobs. The actual level of activity for the year was 49,400 machine-hours. |
| h. |
The cost of goods manufactured for the year was $1,005,400. |
| i. |
Sales for the year totaled $1,417,400 and the costs on the job cost sheets of the goods that were sold totaled $990,400. |
| j. |
The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold. |
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Required:
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Prepare the appropriate journal entry for each of the items above (a. through j.). You can assume that all transactions with employees, customers, and suppliers were conducted in cash.
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