Problem D Log Cabin Homes, Inc., uses a job cost system to account for its jobs,

Question

Problem D Log Cabin Homes, Inc., uses a job cost system to account for its jobs, which are prefabricated houses. As of January 1, its records showed inventories as follows: Materials and supplies $00,00o Work in process (Job Nos. 22 and 23) 180,000o Finished goods (Job No. 21) 140,000 The work in process inventory consisted of two jobs: Job No. Direct Direct labor overhead Total materials 22 $36,000 $40,000 $20,000 23 40,000000 6000 $76,000 $68,000 $96,000 4,000 180,000 Cost and sales data: Materials purchased on account, $400,0o0 Direct Materials used: Job No. 22, $60,000; Job No. 23, $120,000; Job No. 24, 180,000. Indirect materials used, $10,000. Direct labor costs: Job No. 22, $100,000; Job No. 23, $200,000; and Job No. 24, . Adapted from "Accounting Principles: A Business Perspective,F Open College Textbook originally by Hermanson, Edwards, and Maher inancial Accounting (Chapters 9-18)" A Textbook Equity $80,000. Indirect labor costs, $80,000. Overhead is assigned to jobs at $100 per machine-hour. Job No. 22 used 500 machine-hours, Job No. 23 used 1,000 machine-hours, and Job No. 24 used 300 machine-hours in January Job No. 22 and 23 were completed and transferred to Finished Goods Inventory. Job No. 21 and 22 were sold on account for $1,200,oo0, total. Manufacturing overhead costs incurred, other than indirect materials and indirect labor, were depreciation, $60,000, and heat, light, power, miscellaneous, $30,000 (to be paid next month). . .

Explanation / Answer

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Log cabin home INC.

Individual Job sheet

Job

Job 21

Job 22

Job 23

Job 24

Total

Machine hours used

500

1000

300

Beginning Finished goods inventory

140000

Beginning Work in progress

direct material

36000

40000

76000

direct labor

40000

28000

68000

applied overhead

20000

16000

36000

beginning work in progress

0

96000

84000

0

180000

During period

direct material

60000

120000

180000

360000

direct labor

100000

200000

80000

380000

applied overhead (Machine hours used*100)

50000

100000

30000

180000

total cost added during period

0

210000

420000

290000

920000

total cost

140000

306000

504000

290000

1100000

status

finished goods (sold)

finished goods (sold)

finished goods (unsold)

in progress

cost included in

cost of goods sold

cost of goods sold

Finished goods inventory

work in progress inventory

Log cabin home INC.

Journal entries

Date

Account title

Debit

Credit

A

Raw material inventory

400000

Account payable

400000

(To record Purchase of raw material inventory

B 1

Work in progress inventory

360000

Raw material inventory

360000

(To record Issue of raw material inventory into production process.)

B 2

Manufacture overhead

10000

Raw material inventory

10000

(To record Issue of indirect raw material inventory for Manufacturing.)

C 1

Work in progress inventory

380000

Cash

380000

(To record direct labor Consumed.)

C 2

Manufacture overhead

80000

Cash

80000

(To record indirect labor Consumed.)

E

Work in progress inventory

180000

Manufacture overhead

180000

(To record Manufacture overhead Applied to Job.)

F 1

Manufacture overhead

30000

utility payable

30000

(To record Manufacture Overhead to be paid in next month .)

F 2

Manufacture overhead

60000

Accumulated depreciation -equipment

60000

(To Depreciation on factory equipment.)

G

Finished goods inventory (306000+504000)

810000

Work in progress inventory

810000

(To record completion of Finished goods inventory.)

H

Cost of goods sold (306000+140000)

446000

Finished goods inventory

446000

(To record Finished goods Inventory sold.)

I

Account receivable

1200000

Sales Revenue

1200000

(To record sales revenue.)

Actual Manufacture overhead incurred (10000+80000+30000+60000)

180000

Less: Manufacture overhead Applied

180000

Under (Over) applied of overhead

               -  

Do not use minus sign

Log cabin home INC.

Schedule of Cost of goods manufactured

Direct material

360000

Direct labor

380000

Applied overhead

180000

Total manufacturing cost

920000

Add: beginning work in progress

180000

Total cost of work in progress

1100000

Less: ending work in progress

290000

Cost of goods manufactured

810000

Log cabin home INC.

Schedule of Cost of goods Sold

Cost of goods manufactured

810000

Add: Beginning Finished goods Inventory

140000

inventory available for sale

950000

Less: ending Finished goods Inventory

504000

Cost of goods Sold

446000

Add: Under (Over) applied of overhead

0

Adjusted Cost of goods Sold

446000

Log cabin home INC.

Income statement

sales revenue

1200000

Less: cost of goods sold

446000

gross profit

754000

Less: operating expenses (selling and administration expense)

100000

net income

654000

As per policy, we cannot able to post solution more than one question.

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