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Polaris Company Job-Order Costing Summary

The document outlines the transactions for Polaris Company and Primare Corporation related to job-order costing and manufacturing operations for October. It includes details on raw materials, labor costs, manufacturing overhead, and job costs, along with requirements to prepare journal entries and schedules for cost of goods manufactured and sold. The document emphasizes the need to account for direct and indirect costs, as well as the application of overhead in production.

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hema
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9 views2 pages

Polaris Company Job-Order Costing Summary

The document outlines the transactions for Polaris Company and Primare Corporation related to job-order costing and manufacturing operations for October. It includes details on raw materials, labor costs, manufacturing overhead, and job costs, along with requirements to prepare journal entries and schedules for cost of goods manufactured and sold. The document emphasizes the need to account for direct and indirect costs, as well as the application of overhead in production.

Uploaded by

hema
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Chapter 3 Worksheet

Problem 1
The Polaris Company uses a job-order costing system. The following transactions occurred in October:
a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $190,000 ($178,000 direct materials and $12,000 indirect
materials).
c. Accrued direct labor cost of $90,000 and indirect labor cost of $110,000.
d. Depreciation recorded on factory equipment, $40,000.
e. Other manufacturing overhead costs accrued during October, $70,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of
$8 per machine-hour. A total of 30,000 machine-hours were used in October.
g. Jobs costing $520,000 according to their job cost sheets were completed during October and
transferred to Finished Goods.
h. Jobs that had cost $480,000 to complete according to their job cost sheets were shipped to
customers during the month. These jobs were sold on account at 25% above cost.

Required:
1. Prepare journal entries to record the transactions given above.
2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions
from above to each account. Compute the ending balance in each account, assuming that Work in
Process has a beginning balance of $42,000.
Problem2
Primare Corporation has provided the following data concerning last month’s manufacturing operations.

Purchases of raw materials $30,000


Indirect materials included in manufacturing overhead$ 5,000
Direct labor $58,000
Manufacturing overhead applied to work in process $87,000
Underapplied overhead $ 4,000

Inventories Beginning Ending


Raw materials $ 12,000 $18,000
Work in process$ 56,000 $65,000
Finished goods $ 35,000 $42,000

Required:
1. Prepare a schedule of cost of goods manufactured for the month.
2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied
overhead is closed to Cost of Goods Sold.

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