as follows:
Raw materials
$ 40,000
Work in process
$ 18,000
Finished goods
$ 35,000
The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company's
predetermined overhead rate of $16.25 per direct labor-hour was based on a cost formula that estimated $650,000 of
total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were
recorded for the year..
a. Raw materials were purchased on account, $510,000,
b. Raw materials used in production, $480,000. All of of the raw materials were used as direct materials.
c. The following costs were accrued for employee services: direct labor, $600,000; indirect labor, $150,000; selling and
administrative salaries, $240,000.
d. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods
warehousing), $367,000.
e. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $500,000.
f. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all
jobs during the year.
g. Jobs costing $1,680,000 to manufacture according to their job cost sheets were completed during the year.
h. Jobs were sold on account to customers during the year for a total of $2,800,000. The jobs cost $1,690,000 to
manufacture according to their job cost sheets.
Foundational 3-1
Required:
1. What is the journal entry to record raw materials used in production? (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
