Langdon Company Manufactures Custom Designed Toy Sailboats

Essay

Langdon Company manufactures custom designed toy sailboats.The company uses a job order costing system.Overhead is applied based on direct labor hours.Estimated overhead for 2015 is $11,840 and the company estimates it will use 7,400 direct labor hours.The following events occurred in March.
(a.)The company purchased materials for $800 on account.
(b.)The production supervisor requisitioned 15 sheets of fiberglass for constructing the boats.The fiberglass was in stock and originally cost $3 a sheet.
(c.)Direct labor on the boats cost $500.
(d.)More materials were purchased for $350 on account.
(e.)Indirect labor costs were $210.
(f.)A utility bill for the boat factory was $230 and was paid in cash.
(g.)A repair bill for the salesman's car was $75 and will be paid next month.
(h.)Additional materials were placed into production which cost $215.
(i.)Manufacturing overhead was applied (direct labor during March totaled 500 hours).
(j.)One sailboat was completed which cost $325.
(k.)The completed sailboat was sold for $750.Record the sale and the cost of sale.
Required:
(1.)Determine the overhead application rate.
(2.)Prepare journal entries for the above transactions.
(3.)What is the cost of the remaining Work in Process?