Business, 23.05.2020 21:57 ruth4941

Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 20,000 , direct labor $ 12,000 , and manufacturing overhead $ 16,000 . As of January 1, Job No. 49 had been completed at a cost of $ 90,000 and was part of finished goods inventory. There was a $ 15,000 balance in the Raw Materials Inventory account.

During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $ 122,000 and $ 158,000 , respectively. The following additional events occurred during the month.
1. Purchased additional raw materials of $ 90,000 on account.
2. Incurred factory labor costs of $ 70,000 . Of this amount $ 16,000 related to employer payroll taxes.
3. Incurred manufacturing overhead costs as follows: indirect materials $ 17,000 ; indirect labor $ 20,000 ; depreciation expense on equipment $ 12,000 ; and various other manufacturing overhead costs on account $ 16,000 .
4. Assigned direct materials and direct labor to jobs as follows.
Job No.

Direct Materials

Direct Labor

50 $ 10,000 $ 5,000
51 39,000 25,000
52 30,000 20,000a. Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. (Round answer to the nearest whole percent, e. g. 25%.)b. Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)c. Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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Lott Company uses a job order cost system and applies overhead to production on the basis of direct...

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