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Stanley Printing Company: Journal entries and Work in Process Inventory account

Stanley Printing Company began operation in March with three custom orders. The following costs were incurred during the month.

Direct Materials: Direct Labor:

Job A1 $950 Job A1 $ 2,450
Job A2 750 Job A2 1,950
Job A3 500 Job A3 900
Manufacturing Overhead:
Applied at the rate of 110% of direct labor dollars Actual Manufacturing Overhead incurred: $6,100

Jobs A1 and A2 were completed and sold during March. Job A3 was incomplete at the end of the month. Selling prices were as follows: Job A1, $9,400, and Job A2, $6,900.

a. Record the entries for all costs and revenues in T accounts.
b. Verify the ending balance in the Work in Process Inventory account.
c. Determine the amount of underapplied manufacturing overhead for March and transfer it to Cost of Goods Sold.

Solution Summary

a. Record the entries for all costs and revenues in T accounts.
b. Verify the ending balance in the Work in Process Inventory account.
c. Determine the amount of underapplied manufacturing overhead for March and transfer it to Cost of Goods Sold.

$2.19