Question

Pro-Weave manufactures stadium blankets by passing the products through a weaving department and a sewing department. The following information is available regarding its June inventories:

Beginning Inventory Ending Inventory
Raw materials inventory $124,000 $225,000
Work in process inventory-weaving 475,000 415,000
Work in process inventory-Sewing 645,000 725,000
Finished goods inventory 1,276,000 1,416,00


The following additional information describes the company's manufacturing activities for June.


Raw materials purchases (on credit) $505,000
Factory wages cost (paid in cash) 3,220,000
Other factory overhead cost (Other Accounts credited) 186,000
Materials used
Direct-Weaving $304,000
Direct-Sewing 84,000
Indirect 164,000
Lbor used
Direct-Weaving $1,275,000
Direct-Sewing 485,000
Indirect 1,525,000
Overhead rates as a percent of direct labor
Weaving 85%
Sewing 155%
Sales (on credited) $5,350,000


Required:
Prepare journal entries dated June 30 to record:

a. raw materials purchases
b. direct materials usage
c. indirect materials usage
d. direct labor usage
e . indirect labor usage
f. other overhead costs
g. overhead applied
h. payment of total wages costs.

Answer 1

Answer:

a. raw materials purchases

raw materials  505,000 debit

  account payable   505,000 credit

b. direct materials usage

Weaving WIP  304,000 debit

Sewing WIP      84,000 debit

      Raw Materials        388,000 credit

c. indirect materials usage

Factory overhead 164,000 debit

      Raw Materials        164,000 credit

d. direct labor usage

Weaving WIP  1,275,000 debit

Sewing WIP       485,000 debit

      Wages Payables         1,760,000 credit

e . indirect labor usage

Factory overhead  1,525,000 debit

      Wages Payables         1,525,000 credit

f. other overhead costs

Factory Overhead 186,000 debit

      Other Account Payable 186,000 credit

g. overhead applied

Weaving WIP  1,083,750 debit

Sewing WIP        751,750 debit

      factory Overhead         1,760,000 credit

h. payment of total wages costs.

Wages Payable    3,285,000 debit

           Cash                3,285,000 credit

Explanation:

the direct cost is assigned to each department while the indirect cost into factory overhead

g) overhead calculations:

Weaving  $1,275,000 labor x 85%   =   1,083,750

Sewing    $  485,000 labor x 155%  =      751,750

Total applied overehead:                       1,835,500

h) total wages cost:

Wages payable T-account

DEBIT              CREDIT

--------------------------------------

           d)         1,760,000

           e)         1,525,000

       Balance 3,285,000