"Westin Watercraft’s

"Westin Watercraft’s predetermined overhead rate for year 2011 is 200% of direct labor. Information on the company’s production activities during May 2011 follows.

a. Purchased raw materials on credit, $125,000.
b. Paid $84,000 cash for factory wages.
c. Paid $11,000 cash to a computer consultant to reprogram factory equipment.
d. Materials requisitions record use of the following materials for the month.


Job 136 $ 30,000
Job 137 20,000
Job 138 12,000
Job 139 14,000
Job 140 4,000

Total direct materials 80,000
Indirect materials 12,000

Total materials used $ 92,000


e. Time tickets record use of the following labor for the month.


Job 136 $ 8,000
Job 137 7,000
Job 138 25,000
Job 139 26,000
Job 140 2,000

Total direct labor 68,000
Indirect labor 16,000

Total $ 84,000


f. Applied overhead to Jobs 136, 138, and 139.
g. Transferred Jobs 136, 138, and 139 to Finished Goods.
h. Sold Jobs 136 and 138 on credit at a total price of $340,000.
i.

The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building $ 37,000
Depreciation of factory equipment 21,000
Expired factory insurance 7,000
Accrued property taxes payable 31,000

j.
Applied overhead at month-end to the Goods in Process (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Part 1: Set up T-accounts for each of the following general ledger accounts, each of which started the month with a zero balance: Raw Materials Inventory; Goods in Process Inventory; Finished Goods Inventory; Factory Payroll; Factory Overhead; Cost of Goods Sold. Then post the journal entries to these T-accounts and determine the balance of each account.