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Problem 2-25A Journal Entries; T-Accounts; Financial Statements [LO1, LO2, LO3, LO4, LO5, LO6, LO7]
Southworth Company uses a job-order costing system and applies manufacturing overhead cost to jobs on the basis of the cost of direct materials used in production. Its predetermined overhead rate was based on a cost formula that estimated $215,600 of manufacturing overhead for an estimated allocation base of $154,000 direct material dollars.

The following transactions took place during the year (all purchases and services were acquired on account):

a. Raw materials purchased, $142,000.
b. Raw materials requisitioned for use in production (all direct materials), $147,000.
c. Utility bills incurred in the factory, $21,000.
d. Costs for salaries and wages were incurred as follows:


Direct labor $ 216,000
Indirect labor $ 64,300
Selling and administrative salaries $ 143,000

e. Maintenance costs incurred in the factory, $23,000.
f. Advertising costs incurred, $121,000.
g.
Depreciation recorded for the year, $50,000 (80% relates to factory assets, and the remainder relates to selling and administrative assets).
h.
Rental cost incurred on buildings, $89,000 (70% of the space is occupied by the factory, and 30% is occupied by sales and administration).
I. Miscellaneous selling and administrative costs incurred, $12,000.
j. Manufacturing overhead cost was applied to jobs, $ ?
k.
Cost of goods manufactured for the year, $553,000.
l.
Sales for the year (all on account) totaled $1,400,000. These goods cost $510,000 according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were as follows:


Raw Materials $ 19,000
Work in Process $ 27,000
Finished Goods $ 40,000

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And what is it you would like to know, we don't supply model answers, which might incidentally be found in the back of the text book.