Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, i
ID: 2525838 • Letter: C
Question
Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,600, direct labor of $4,100, and applied overhead of $3,485. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $29,500, Job 121 is started and completed, and Job 122 is started and still in process at the end of the month. Custom Cabinetry incurs the following costs during July.
1. Prepare journal entries for the following in July.
Direct materials used in production.
Direct labor used in production.
Overhead applied.
The sale of Job 120.
Cost of goods sold for Job 120.
2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory general ledger accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30.)
Prepare journal entries for the above transactions in July.
July Product Costs Job 120 Job 121 Job 122 Total Direct materials $ 1,900 $ 6,200 $ 2,900 $ 11,000 Direct labor 3,400 4,800 2,700 10,900 Overhead applied ? ? ? ?Explanation / Answer
1.
2.
Working:
CUSTOM CABINETRY General journal for the month of July Date Account Title Debit Credit July.31 Work-in-process 11000 Raw material 11000 (Raw material used in production) July.31 Work-in-process 10900 Wages Payable 10900 (Direct labor used for production) July.31 Work-in-process 9265 Manufacturing overhead 9265 (Manufacturing applied at 85% of direct labor) July.31 Finished Goods 37455 Work-in-process 37455 (Cost of finished goods tranferred to finished goods ) July.31 Cost of goods sold 22375 Finished Goods 22375 (Cost of Job. 120 transferred to cost of goods sold on sale) July.31 Accounts Receivable 29500 Sales 29500 (Sale of Job 120 recorded)Related Questions
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