The Commonwealth Company Uses a Job-Order Costing System and Applies

Essay

The Commonwealth Company uses a job-order costing system and applies manufacturing overhead cost to jobs using a predetermined overhead rate based on the cost of materials used in production.At the beginning of the year,the following estimates were made as a basis for computing the predetermined overhead rate: manufacturing overhead cost,$186,000;direct materials cost,$155,000.The following transactions took place during the year (all purchases and services were acquired on account):
a.Raw materials purchased,$96,000.
b.Raw materials requisitioned for use in production (all direct materials),$88,000.
c.Utility bills incurred in the factory,$17,000.
d.Costs for salaries and wages incurred as follows: e.Maintenance costs incurred in the factory,$12,000.
f.Advertising costs incurred,$98,000.
g.Depreciation recorded for the year,$75,000 (75 percent relates to factory assets and the remainder relates to selling,general,and administrative assets).
h.Rental cost incurred on buildings,$80,000 (80 percent of the space is occupied by the factory,and 20 percent is occupied by sales and administration).
i.Miscellaneous selling,general,and administrative costs incurred,$12,000.
j.Manufacturing overhead cost was applied to jobs.
k.Cost of goods manufactured for the year,$480,000.
l.Sales for the year (all on account)totaled $900,000.These goods cost $550,000 to manufacture.
Required:
Prepare journal entries to record the information above.Key your entries by the letters a through l.