Assignment 11A – Problem 1 A manufacturing company uses direct labor hours as the basis for the predetermined manufacturing overhead rate.  Amounts for the year are as follows: Transactions that occurred during the first year of operations are as follows: Estimated total manufacturing overhead $500,000 Estimated total direct labor hours 100,000 Estimated total machine hours 40,000 Actual total manufacturing overhead $467,000 Actual direct labor costs $805,000 Actual total direct labor hours 89,405 Actual total machine hours 39,100 Raw materials purchased $106,000 Raw materials requisitioned $92,000 General and administrative expenses $89,000 Warehouse expenses $64,000 Over or under applied overhead ? Required: A.    Record all transactions for the manufacturing company for the year.    Note:  Make them in the normal order in which they would occur, not as listed.              You can only make journal entries for dollar amounts.  B.    Calculate the total cost of the products. Answer: A.    Record the transactions. 1.  Purchased raw materials, $106,000. DM $106,000.00 Cash $106,000.00 2.  Used (requisitioned) raw materials to the production line, $92,000. WIP $92,000.00 DM $92,000.00 3.  Actual direct labor costs incurred/paid, $805,000. WIP 805,000 Wage Expense 805,000 4.  Actual manufacturing overhead incurred, $467,000. WIP 467,000 MOH 467,000 5.  Apply overhead (This is not on the  list; however, you must realize that it must be done.) WIP MOH Calculations: 6.  Close overhead (Again, this is not on the list; however, it must be done.      Get manufacturing overhead to $0 – Make applied equal to actual.) Calculations: 7.  Record period expenses. B.    Calculate the total cost of the product. Raw materials Direct labor Manufacturing overhead applied Under applied MOH      Total product costs

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