Allenton Company Is a Manufacturing Firm That Uses Job-Order Costing

question 114

Essay

Allenton Company is a manufacturing firm that uses job-order costing.At the beginning of the year,the company's inventory balances were as follows: 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 31,000 machine-hours and incur $248,000 in manufacturing overhead cost.The following transactions were recorded for the year:
a.Raw materials were purchased,$411,000.
b.Raw materials were requisitioned for use in production,$409,000 ($388,000 direct and $21,000 indirect).
c.The following employee costs were incurred: direct labor,$145,000;indirect labor,$61,000;and administrative salaries,$190,000.
d.Selling costs,$148,000.
e.Factory utility costs,$12,000.
f.Depreciation for the year was $121,000 of which $114,000 is related to factory operations and $7,000 is related to selling,general,and administrative activities.
g.Manufacturing overhead was applied to jobs.The actual level of activity for the year was 29,000 machine-hours.
h.The cost of goods manufactured for the year was $783,000.
i.Sales for the year totaled $1,107,000 and the costs on the job cost sheets of the goods that were sold totaled $768,000.
j.The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.
Required:
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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Definitions:

Glorious Revolution

was a peaceful coup in England in 1688 that resulted in the overthrow of King James II and the establishment of William III and Mary II as co-rulers.

James II

King of England, Scotland (as James VII), and Ireland from 1685 until he was deposed in 1688, known for his attempts to re-establish Catholicism in Britain.

William and Mary

The monarchs of England, Scotland, and Ireland from 1689 to 1694, who came to power during the Glorious Revolution and jointly ruled as king and queen.

Amsterdam

The capital city of the Netherlands, known for its historic canals, art museums, and as a major hub of finance and culture.