Peterson Corporation uses a job costing system. Record the following transactions in Peterson's general journal for the current month:

1)        Peterson Corporation uses a job costing system. Record the following transactions in Peterson's general journal  for the  current month:

a)                Purchased materials on  account, $70,000.

b)               Requisitioned  $48,000   of direct  materials and $6,500  of indirect  materials  for use in   production.

c)                Factory payroll  incurred,  $75,000.  Allocated  factory payroll,  85% direct labor,  15% indirect   labor.

d)               Recorded depreciation on factory equipment $13,500, and other manufacturing overhead of $45,900 (credit  accounts payable).

e)                Allocated  manufacturing  overhead based on  130%  of direct labor cost.

f)                Cost of completed  production  for the  current month,  $165,000.

g)               Cost of finished  goods  sold,  $130,000;   selling  price, $188,500  (all sales on  account).

Answer:	General Journal Date     Accounts	Debit	Credit
	a)         Raw Materials Accounts Payable	70,000	70,000
	b)         Work in  Process	48,000
	Manufacturing Overhead Raw Materials	6,500	54,500
	c)         Work in  Process	63,750
	Manufacturing Overhead Wages Payable	11,250	75,000
	d)         Manufacturing  Overhead Accum. Depr.-Factory Equip.	59,400	13,500
	Accounts Payable		45,900
	e)         Work in Process Manufacturing  Overhead	82,875	82,875
	f)          Finished Goods Work in  Process	165,000	165,000
	g)         Accounts Receivable Sales Revenue Cost of Goods Sold Finished Goods	188,500 130,000	188,500 130,000

2)        The following account balances as of January 1, 2009, were selected from the general ledger of Browning Manufacturing  Company:

Work in  process inventory	$0
Materials  inventory	$24,000
Finished  goods inventory	$44,000
Additional data:

1)                       Actual manufacturing  overhead for  January amounted to $59,000.

2)                       Total direct labor  cost for January was $56,000.

3)                       The predetermined manufacturing overhead rate is based on direct labor cost. The budget for 2009 called  for $300,000   of direct labor  cost and $360,000   of manufacturing  overhead costs.

4)                       The only  job  unfinished  on  January 31,  2009,  was Job No. 410,  for which total labor  charges were

$5,600  (700  direct labor  hours)  and total direct material charges were $10,000.

5)                       Cost of direct materials placed in production during January totaled $100,000. There were no indirect material requisitions   during  January, 2009.

6)                       January 31  balance in  materials  inventory  was $29,000.

7)                       Finished  goods  inventory  balance on  January 31 was $30,000.

Required:

a)                Determine  the predetermined  manufacturing  overhead rate.

b)               Determine  the amount  of materials purchased during  January.

c)              Determine cost of goods  manufactured for January.

d)               Determine  the work in  process inventory  balance on January 31.

e)                Determine cost of goods  sold  for January.

f)                Determine whether manufacturing overhead is overallocated or underallocated and by what amount. Answer:   a)   $360,000/$300,000   = 120%  of direct labor  cost

b)         $100,000   + $29,000  - $24,000  = $105,000

c)         $56,000  + (1.20  × $56,000)   + $100,000  - $5,600  - $10,000  - (1.20  × $5,600)  = $200,880

d)         $5,600  + (1.20 × $5,600)  + $10,000  =  $22,320

e)         $44,000  + $200,880   - $30,000  = $214,880

f)         actual manufacturing  overhead = $59,000;

allocated  manufacturing  overhead = $67,200   $67,200    -  $59,000  = $8,200 overallocated