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Question: selfstudy problem 41 journal entries and accounting for overhead watkins...

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Self-Study Problem 4-1 Journal Entries and Accounting for Overhead Watkins Machinery Company uses a normal job costing system. The company has the following partial trial balance information for March, the last month of its fiscal year: Materials inventory (X, 13,500 Y, $9,000; Indirect materials, $22,500) Work-in-process inventory (this is Job 101) Finished goods inventory (this is Job 100) $45,000 22,800 38,000 These transactions relate to the month of March: a. Purchased direct materials and indirect materials with the following summary of receiving reports: Material x Material Y Indirect materials Total 45,000 45,000 $112,500b. Issued direct materials and indirect materials with this summary of requisitions: Material X Material Y Subtotal Indirect materials Total Job 101 s 22,500 18,000 40,500 Job 102 13,500 3,000 $16,500 36,000 21,000 57,000 36,000 93,000 c. Factory labor incurred is summarized by these time tickets Job 101 Job 102 Indirect labor Total 45,600 30,400 22,500 $98,500d. Factory utilities, factory depreciation, and factory insurance incurred is summarized as follows: Utilities Depreciation Insurance Total 2,250 67,500 11,250 81,000 e. Factory overhead costs were applied to jobs at the predetermined rate of $15 per machine hour. Job 101 incurred 5,400 machine hours; Job 102 used 3,600 machine hours f. Job 101 was completed; Job 102 was still in process at the end of March. g. Job 100 and Job 101 were shipped to customers during March. Both jobs had gross margins of 20% based on manufacturing cost. h. The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of March.Required:2. Compute the ending balance of the Work-in-process inventory account.Compute the ending balance of the Work-in-process inventory account. Direct materials Direct labor Factory overhead applied Total ending balance3. Compute the overhead variance and indicate whether it is overapplied or underappliedCompute the overhead variance and indicate whether it is overapplied or underapplied. Actual factory overhead Indirect materials Indirect labor Utilities Depreciation Insurance Less: Applied factory overhead Underapplied factory overhead4. Close the overhead variance to the Cost of goods sold account.Journal entry worksheet To record the disposition of underapplied factory overhead by closing the Factory overhead account to the Cost of goods sold account. Note: Enter debits before credits. Transaction General Journal Debit Credit

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