Question

Widmer Watercraft’s predetermined overhead rate for year 2015 is 200% of direct labor. Information on the company’s production activities during May 2015 follows. a. Purchased raw materials on credit, $220,000. b. Materials requisitions record use of the following materials for the month. Job 136 $ 49,000 Job 137 33,000 Job 138 19,800 Job 139 22,800 Job 140 7,200 Total direct materials 131,800 Indirect materials 20,500 Total materials used $ 152,300 c. Paid $15,750 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 $ 12,000 Job 137 10,500 Job 138 37,900 Job 139 39,200 Job 140 3,600 Total direct labor 103,200 Indirect labor 26,500 Total $ 129,700 e. Applied overhead to Jobs 136, 138, and 139. f. Transferred Jobs 136, 138, and 139 to Finished Goods. g. Sold Jobs 136 and 138 on credit at a total price of $535,000. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building $ 68,500 Depreciation of factory equipment 36,500 Expired factory insurance 11,000 Accrued property taxes payable 35,500 i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.