The Shotz Company Had the Following Transactions and Events During

question 100

Essay

The Shotz Company had the following transactions and events during its first year of operations. Estimated overhead for the year was $770,000; estimated direct labor cost for the year was $350,000.
1. Purchased materials on account, $567,000.
2. Requisitioned materials for production as follows: direct materials - 85 percent of purchases, indirect materials - 12 percent of purchases.
3. Direct labor for production is $331,000, indirect labor is $125,000.
4. Overhead incurred (not including materials or labor): $529,000.
5. Overhead is applied to production based on direct labor cost at the rate of ________.
6. Goods costing $976,000 were completed during the period.
7. Goods costing $513,200 were sold on account for $776,000.
Required:
(a) Prepare the journal entries to record the transactions for the year.
(b) Prepare the journal entry to prorate the over- or underapplied overhead to the appropriate accounts.

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Definitions:

Fetish

An object believed to have supernatural powers, or in psychology, a form of sexual desire in which gratification is linked to an abnormal degree to a particular object, item of clothing, part of the body, etc.

Magical Powers

These are abilities in fantasy or supernatural genres that allow characters or beings to perform actions beyond the natural world's laws.

Spell

A verbal or written formula thought to have magical force, used to bring about a specific desired outcome.

Divination Technique

A method or practice used in various cultures to seek knowledge of the future or the unknown, often involving interpreting patterns in physical objects or phenomena.