The Commonwealth Company Uses a Job-Order Costing System and Applies

question 127

Essay

The Commonwealth Company uses a job-order costing system and applies manufacturing overhead cost to jobs using a predetermined overhead rate based on the cost of materials used in production.At the beginning of the year,the following estimates were made as a basis for computing the predetermined overhead rate: manufacturing overhead cost,$186,000;direct materials cost,$155,000.The following transactions took place during the year (all purchases and services were acquired on account):
a.Raw materials purchased,$96,000.
b.Raw materials requisitioned for use in production (all direct materials),$88,000.
c.Utility bills incurred in the factory,$17,000.
d.Costs for salaries and wages incurred as follows: e.Maintenance costs incurred in the factory,$12,000.
f.Advertising costs incurred,$98,000.
g.Depreciation recorded for the year,$75,000 (75 percent relates to factory assets and the remainder relates to selling,general,and administrative assets).
h.Rental cost incurred on buildings,$80,000 (80 percent of the space is occupied by the factory,and 20 percent is occupied by sales and administration).
i.Miscellaneous selling,general,and administrative costs incurred,$12,000.
j.Manufacturing overhead cost was applied to jobs.
k.Cost of goods manufactured for the year,$480,000.
l.Sales for the year (all on account)totaled $900,000.These goods cost $550,000 to manufacture.
Required:
Prepare journal entries to record the information above.Key your entries by the letters a through l.

---

Definitions:

Need to Belong

An inherent human drive to form and maintain strong, stable interpersonal relationships.

Proximity Effect

The phenomenon where individuals become more attracted or feel closer to those who are physically nearer to them.

Relationships

Connections or associations between two or more people, which can vary in intensity and importance.

Anterior Cingulate Cortex

A part of the brain involved in emotional regulation, decision-making, and processing social information.