Prepare the Necessary Journal Entries from the Following Information for Blalock

question 17

Essay

Prepare the necessary journal entries from the following information for Blalock Company.
a. Purchased materials on account, $56,700.
b. Requisitioned materials for production as follows: direct materials - 80 percent of purchases, indirect materials - 15 percent of purchases.
c. Direct labor for production is $33,100, indirect labor is $12,500.
d. Overhead incurred (not including indirect materials or indirect labor): $52,900.
e. Overhead is applied to production based on direct labor cost at the rate of 220 percent.
f. Goods costing $97,600 were completed during the period.
g. Goods costing $51,320 were sold on account for $77,600.
h. Close the overhead control account to Cost of Goods Sold.

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Definitions:

Finished Goods Inventory

Finished Goods Inventory consists of the completed products that are ready for sale but have not yet been sold, representing one of the components of a company's total inventory.

Predetermined Overhead Rate

A rate used to allocate estimated overhead costs to products or job orders, based on a particular activity base.

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or services, often used to allocate labor costs to products.

Overhead

All indirect costs of running a business that are not directly associated with the production of goods or services, such as rent, utilities, and administrative salaries.