Donald Transport assembles prestige manufactured homes. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and one indirect-cost pool (manufacturing overhead allocated at a budgeted $31 per machine-hour

Materials Control, beginning balance, January 1, 2014 $18
Work-in-Process Control, beginning balance, January 1, 2014 $9
Finished Goods Control, beginning balance, January 1, 2014 $10
Materials and supplies purchased on credit $154
Direct materials used $152
Indirect materials (supplies) issued to various production departments $19
Direct manufacturing labor $96
Indirect manufacturing labor incurred by various production departments $34
Depreciation on plant and manufacturing equipment $28
Miscellaneous manufacturing overhead incurred (ordinarily would be detailed as repairs, utilities, etc., with a corresponding credit to various liability accounts) $13
Manufacturing overhead allocated, 3,000,000 actual machine-hours ?
Cost of goods manufactured $298
Revenues $410
Cost of goods sold $294
Prepare journal entries. Number your entries. Explanations for each entry may be omitted. Post to T-accounts. What is the ending balance of Work-in-Process Control?
Show the journal entry for disposing of under- or overallocated manufacturing overhead directly as a year-end writeoff to Cost of Goods Sold. Post the entry to T-accounts.
How did Donald Transport perform in 2014?

1.Work in process (end) = $52.

2.Journal entry to record disposing of overhead:

     Dr Cost of goods sold  1000000

                Cr Factory overhead      1000000

Explanation:

Predetermined rate = $31 per machine hour.

Actual machine hours = 3000000 hours.

Applied factory overhead = actual machine hours * predetermined rate

                                        = 3000000 * 31 = $ 93000000.

Material used = material (open) + purchased - material (end)

                  152     = 18+154 - material( end)

       Material (end) = 20.

Manufacturing cost = material used + direct labor + factory overhead

                            = 152+96+(19+34+28+13) = 341

Journal entry

1. Dr Material 154

                Cr Accounts payable  154

(Material and supplies purchased on account)

2. Dr work in process 152

                        Cr Material  152

(Direct material used)

3.Dr Factory overhead 19

                        Cr material   19

( Indirect material issued)

4. Dr Work in process  96

                 Cr Payroll           96

(Direct labor used)

5. Dr Factory overhead 34

                            Cr payroll  34

( Indirect labor used)

6. Dr Factory overhead  28

                        Cr Accumulated depreciation 28

( Depreciation on plant)

7. Dr Factory overhead  13

                   Cr Accounts payable 13

( Various overhead incurred)

T-account

Work in process                                                           Material

DrCr__                                         __ DR CR

(open) 9  --                                                                 18  

152                                                                             154   ---    152

 96                                                                                         ---    19

Accounts payable                                                   Factory overhead

DrCr___                                ___ DR Cr

                ---  154                                                    19    ---

               ---   13                                                     34   ---

                                                                               28  --

                                                                               13   --

Payroll                                                             Accumulated deprec

Dr Cr__                                    __ Dr Cr

             --- 96                                                                     ---    28

             ---  34

Accounts payable Prepaid insurance

DrCr___ Dr Cr_

Cost of goods manufactured:

Cost of goods manufactured = manufacturing cost+ work in process (open)-work in process (end)

 298 = 341 + 9 - work in process (end)

work in process (end) = 350 - 298 = $52.

Cost of goods sold:

Cost of goods sold = Finished goods (open) + cost of goods manufactured - finished goods (end)

  294 = 10 +298 - finished goods (end)

     Finished goods (end) = 308-294 = $14.

Over/under applied overhead:

Actual overhead = (19+34+28+13) = 94

Suppose overhead is in million so $ 94000000.

Applied overhead =$ 93000000

Under applied overhead = $1000000.

Adjusted cost of goods sold:

cost of goods sold = 294000

Add: under applied overhead = 1000000

Adjusted cost of goods sold = 1294000