Question

Exercise 15-5 Manufacturing cost flows LO P1, P2, P3 Custom Cabinetry has one job in process (Job 120) as of June 30, at that time, its job cost sheet reports direct materials of $8.000 direct labor of $3,400, and applied overhead of $2.720. Custom Cabinetry applies overhead at the rate of 80% of direct labor cost During July, Job 120 is sold on account) for $31.500. 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 July Product Costs Direct materials Direct labor Overhead applied Job 120 $1,900 3,600 Job 121 $6,500 4,800 Job 122 $3,800 2,400 Total $12,200 10.800 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 accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30 ) Complete this question by entering vuran

Answer 1

Required 1:

July Product Costs	Job 120	Job 121	Job 122	Total
Direct Materials	$1,900	$6,500	$3,800	$12,200
Direct Labor	3,600	4,800	2,400	$10,800
Overhead Applied	2880	3840	1920	$8,640
Total	$8,380	$15,140	$8,120	$31,640

Journal
	Account	Debit	Credit
Direct materials used in production.
	Work in Progress inventory	$12,200
	Raw Materials inventory		12200
Direct labor used in production.
	Work in Progress inventory	$10,800
	Factory Payroll Payable		10800
Overhead applied.
	Work in Progress inventory	$8,640
	Factory Overhead		8640
The sale of Job 120
	Accounts Receivable	31500
	Sales		31500
cost of goods sold for Job 120
	COGS (Job 120 $14,120+8,380)	22500
	Finished goods inventory		22500

Required 2:

Job #	WIP	Finished Goods
	Job 122	Job 121
Direct Materials	3,800	6,500
Direct Labor	2,400	4,800
Overhead Applied	1,920	3,840
Total	8,120	15,140