Langdon Company Manufactures Custom Designed Toy Sailboats

question 83

Essay

Langdon Company manufactures custom designed toy sailboats.The company uses a job order costing system.Overhead is applied based on direct labor hours.Estimated overhead for 2018 is $11,840 and the company estimates it will use 7,400 direct labor hours.The following events occurred in March.
(a. )The company purchased materials for $800 on account.
(b. )The production supervisor requisitioned 15 sheets of fiberglass for constructing the boats.The fiberglass was in stock and originally cost $3 a sheet.
(c. )Direct labor on the boats cost $500.
(d. )More materials were purchased for $350 on account.
(e. )Indirect labor costs were $210.
(f. )A utility bill for the boat factory was $230 and was paid in cash.
(g. )A repair bill for the salesman's car was $75 and will be paid next month.
(h. )Additional materials were placed into production that cost $215.
(i. )Manufacturing overhead was applied (direct labor during March totaled 500 hours)
(j. )One sailboat was completed which cost $325.
(k. )The completed sailboat was sold for $750.Record the sale and the cost of sale.
Required:
(1. )Determine the overhead application rate.
(2. )Prepare journal entries for the above transactions.
(3. )What is the cost of the remaining Work in Process?

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Definitions:

Cognitive Theorists

Scholars and psychologists who study the mental processes involved in knowing, including aspects such as awareness, perception, reasoning, and judgment.

Depressed People

Individuals experiencing a mood disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Hopeless

A state of despair, characterized by a lack of hope, optimism, and a feeling that there is no possibility of improvement.

Mania

A mental state characterized by extremely elevated mood, energy, and unusual thought patterns, often associated with bipolar disorder.