Question

During May, Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305. The total direct labor was incurred at a rate of $28 per direct labor hour for Job 200 and $24 per direct labor hour for Job 305. Bergan Company estimates that total factory overhead costs will be $620,000 for the year. Direct labor hours are estimated to be 80,000. Journalize the entry to record the flow of labor costs into production during May.

Answer 1

Answer: Please see answers in explanation column

Step-by-step explanation:

a)Total Labor Cost for Job 200 = Labor Hours x Direct labor rate

= 2,500 x $ 28

= $ 70,000

b)Total Labor Cost for Job 305 = Labor Hours x Direct labor rate

= 3,000 x $ 24

= $ 72,000

Labor Cost for Job 200 and Job 305 during May = $ 70,000 + $ 72,000

= $ 142,000

Date Account Titles and Explanation Debit Credit

May 31st Work In Progress $142,000

Wages Payable $ 142,000