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Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

1. Purchased raw materials on credit, $240,000.
2. Materials requisitions record use of the following materials for the month.

Job 136	$	50,000
Job 137		32,500
Job 138		19,600
Job 139		22,600
Job 140		7,000
Total direct materials		131,700
Indirect materials		20,000
Total materials used	$	151,700

3. Paid $15,500 cash to a computer consultant to reprogram factory equipment.
4. Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$	12,200
Job 137		10,600
Job 138		37,700
Job 139		39,000
Job 140		3,600
Total direct labor		103,100
Indirect labor		24,000
Total	$	127,100

5. Applied overhead to Jobs 136, 138, and 139.
6. Transferred Jobs 136, 138, and 139 to Finished Goods.
7. Sold Jobs 136 and 138 on credit at a total price of $545,000.
8. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building	$	68,500
Depreciation of factory equipment		37,500
Expired factory insurance		11,000
Accrued property taxes payable		37,000

9. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

3. Post the journal entries for the transactions to the following T-accounts, each of which started the month with a zero balance.

Answer 1

	JOB 136	JOB 137	JOB 138	JOB 139	JOB 140	TOTAL
Materials	50,000	32,500	19,600	22,600	7,000	131,700
Labor	12,200	10,600	37,700	39,000	3,600	103,100
Overhead	24,400	21,200	75,400	78,000	7,200	206,200
TOTAL	86,600	64,300	132,700	139,600	17,800	441,000

T-Accounts:

RAW MATERIALS INVENTORY
	Debit$		Credit $
a)	240,000	b)	151,700
End. bal.	88,300

WORK IN PROCESS INVENTORY
	Debit$		Credit $
b)	131,700	f)	358,900
d)	103,100
e)	177,800
i)	28,400
End. bal.	82,100

FACTORY OVERHEAD
	Debit$		Credit $
b)	20,000	e)	177,800
c)	15,500	i)	28,400
d)	24,000
h)	154,000
End. bal.	6,800

FINISHED GOODS INVENTORY
	Debit$		Credit $
f)	358,900	g)	219,300
End. bal.	139,600

COST OF GOODS SOLD
	Debit$		Credit $
g)	219,300
End. bal.	219,300

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