Arned Corporation recorded the following transactions for the just completed month. a.$70,000 in raw materials were purchased on account. b.$68,000 in raw materials were requisitioned for use in production. Of this amount, $54,000 was for direct materials and the remainder was for indirect materials. c.Total labor wages of $121,000 were incurred. Of this amount, $103,900 was for direct labor and the remainder was for indirect labor. d.Additional manufacturing overhead costs of $198,000 were incurred.

raw materials   70,000 debit

   accounts payable   70,000 credit

WIP inventory     54,000 debit

facotry overhead 14,000 debit

             raw materials        68,000 credit

WIP Inventory      103,900 debit

factory ovehread     17,100 debit

          wages payable          121,000 credit

Explanation:

We reocrd considering debit = credit

The indirect materials and labor are recorderd under factory overhead to latter compare with the amount of overhead applied.

these amount are the diference between total wages and totals materials materials requisitiion and the direct labor and direct materials respectively.

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30