I can not answer all the questions. Could you please help me ?


a. $76,300 in raw materials were purchased for cash.
Debit Raw materials 76,300
Credit Cash 76,300
b. $72,500 in raw materials were requisitioned for use in production. Of this amount, $66,000 was for direct materials and the remainder was for indirect materials.
Debit Manufacturing overhead 6,500
Work in process 66,000
Credit Raw Materials 72,500
c. Total labor wages of $151,200 were incurred and paid. Of this amount, $134,900 was for direct labor and the remainder was for indirect labor.
Debit Work in process 134,900
Manufacturing overhead 16,300
Credit cash 151,200
d. Additional manufacturing overhead costs of $125,300 were incurred and paid.
Debit Manufacturing overhead cost 125,300
Credit cash 125,300
e.Manufacturing overhead costs of $178,700 were applied to jobs using the company's predetermined overhead rate.

f.All of the jobs in progress at the end of the month were completed and shipped to customers.

g. The underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold.



Cost of goods sold = ?


Thank you for you help.

You have 3 costs that have to go into WIP, which will account for all manufacturing costs: direct material, direct labor and overhead. The first two are put directly into that account (hence, calling them direct). The third, overhead, is "applied" to that account based on a rate that was determined at the beginning of the year. Since they gave you the total, don't worry about the rate. You don't need to calculate anything there. You just need to get that third cost, overhead, into the WIP account.

The overhead account has collected some costs in it with a debit. Applying it means removing it from that account and putting it into WIP.

One thing that is useful for manufacturing: all of these accounts are debit accounts. Unless a non-manufacturing account is used (like cash or payables or whatever), all of these accounts you credit out of and debit into. So any time you're moving from one account to another, you're crediting from one and debiting into the next.

As for the finished jobs, put together your three costs. If the jobs are finished, they're no longer "in process," so they need removed from WIP and moved on to Finished Goods. When they are sold, they are moved out of Finished Goods and into Cost of Goods Sold. (Much like merchandising.) Remember that COGS is the cost of whatever it was you just sold. And it's those costs you've been collecting up in WIP and Finished Goods.

As for over and under applied overhead... Remember that the debit into Overhead is actual costs. The credit out of Overhead is the applied. If you end up with a debit balance, you've applied less than your actual costs, which is under-applied. If you end up with a credit balance, you've applied more than what you had in there, which is over-applied. In order to close that out to COGS, you have to remove whatever balance remains in there, which could be a debit or a credit, whatever is needed to wipe out the account. The other side of that entry is COGS, whatever it takes to balance the entry.

Since all jobs were finished and all finished jobs were sold, and under/over applied overhead is closed to COGS, there's actually a very quick and easy way to answer that last question, if you can think of it. :-) (Extra credit for that one, except I'm not the one grading you.)

With the above info, can you complete the missing entries? The use of t accounts might help.