Recording Direct Labor and Factory Overhead
Chamlee Industries Inc. manufactures recreational vehicles. Chamlee Industries uses a job order cost system. The time tickets from May jobs are summarized below.
Job 5-100
Job 5-101
Job 5-102
Job 5-103
$7,040
4,290
5,280
3.190
1,925
Factory supervision
Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $35 per direct labor hour. The direct labor rate is $25 per hour.
a. Determine the total factory labor costs transferred to Work in Process and Factory Overhead for May. If required, round your answers to nearest dollar.
Factory labor costs transferred to Work in
Process
Factory labor costs transferred to Factory
Overhead
b. Determine the amount of factory overhead applied to production for May. If required, round your answer to nearest dollar.
c. Illustrate the effects of the factory overhead applied in (b) on the accounts and financial statements.
If no account or activity is affected, select "No effect" from the drop-down list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.
Statement of
Balance Sheet
Cash Flows
Assets
Liabilities
Work in Process + No effect
= No effect
Statement of Cash Flows
No effect
++
Stockholders' Equity
Income
Statement
No effect
Income Statement
No effect