The Poohbear company – job-order costing

| March 31, 2017


The Poohbear company uses a job-order costing system. The following data relate to October,the first month of the company’s fiscal year.

a) raw materials purchased on account $210,000

b) raw materials issued to production, $190,000($178,000 direct materials,$12,000 indirect materials)

c) direct labor cost incurred $90,000;indirect ;labor cost incurred $110,000

d) depreciation recorded on factory equipment $40,000

e) other manufacturing overhead cost incurred during October, $70,000(credit Accounts payable)

f) the company applies manufacturing overhead cost to production on the basis of $8 per machine-hour. A total of $30,000 machine-hours were recorded for October.

g) production orders costing $520,000 according to their job cost sheets were completed during October and transferred to finished goods.

h) production orders that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 25% above cost.


1) Prepare journal entries to records the information given above

2) prepare T-accounts for Manufacturing overhead and work in process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that work in process has a beginning balance of $42,000

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