etry has one job in process (Uob 120) as of June 30; at that time, its job cost
ID: 2526248 • Letter: E
Question
etry has one job in process (Uob 120) as of June 30; at that time, its job cost sheet reports direct materials of $8,800 direct labor of $3.500, and applied overhead of $2,975. Custom Cabinetry applies overhead at therate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $25,000, 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 Suly Product Costs 3ob 1 28 Job 121 Job 122 Total $2,000 $6,800 $3,900 $12,700 Direct materials Direct labor Overhead applied 2,400 4,80 3,900 11,100 1. Prepare journal entries for the following in July a. Direct materials used in production. b. Direct labor used in production c. Overhead applied. d. The sale of Job 120 e. 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. (Assur there are no jobs in Finished Goods Inventory as of June 30) Complete this question by entering your answers in the tabs below. Required 1 Required 2Explanation / Answer
Solution:
Primary working
Job
120
121
122
Total
Beginning Work in Process
$15,275
$0
$0
$15,275
Plus: Cost incurred in July
Direct materials
$2,000
$6,800
$3,900
$12,700
Direct labor
$2,400
$4,800
$3,900
$11,100
Overhead Applied (85% of direct labor cost)
$2,040
$4,080
$3,315
$9,435
Total Cost
$21,715
$15,680
$11,115
$48,510
Present Status
Completed and Sold
Completed and lying in Finished Goods Inventory
Not completed ending work in process
Part 1 --- Journal Entries
Event
General Journal
Debit
1a.
Work in Process Inventory
$12,700
Direct materials
$12,700
1b.
Work in Process Inventory
$11,100
Direct labors or Wages Payable
$11,100
1c.
Work in Process Inventory
$9,435
Factory Overhead
$9,435
1d.
Accounts Receivable
$25,000
Sales Revenue
$25,000
1e.
Cost of Goods Sold
$21,715
Finished Goods Inventory
$21,715
Part 2 – Refer the primary working
July 31 Ending Balance in Work In Process Inventory = $11,115
July 31 Ending Balance in Finished Goods Inventory = $15,680
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Job
120
121
122
Total
Beginning Work in Process
$15,275
$0
$0
$15,275
Plus: Cost incurred in July
Direct materials
$2,000
$6,800
$3,900
$12,700
Direct labor
$2,400
$4,800
$3,900
$11,100
Overhead Applied (85% of direct labor cost)
$2,040
$4,080
$3,315
$9,435
Total Cost
$21,715
$15,680
$11,115
$48,510
Present Status
Completed and Sold
Completed and lying in Finished Goods Inventory
Not completed ending work in process
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