Reference no: EM131670785

Question - Winston Manufacturing uses direct labor cost to apply overhead to its production. The budgeted direct labor cost and budgeted manufacturing overhead were $400,000 and $480,000, respectively. The following cost data were experienced last year:

Material inventory, 1/1/04                    $10,000

Material inventory, 12/31/04                 2,000

Work-in-process, 1/1/04                       12,000

Finished goods, 1/1/04                          33,000

Finished goods, 12/31/04                       23,000

Purchases of material                            61,000

Direct labor incurred                              45,000

Indirect material                                    13,000

Indirect labor                                         12,000

Other manufacturing overhead                 20,000

Unadjusted cost of goods sold                  170,000

1. Close the over/under applied overhead to cost of goods sold (journal entry).

2. Prorate the over/under applied overhead to the proper accounts using the ending account balances for prorating (journal entry).

3. Prepare the cost of goods manufactured statement, cost of goods manufactured statement.