Question

Check my work 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 $6,100, direct labor of $4,300, and applied overhead of $3,655. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $30,000, 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 eBook Hint July Product Coats Direct materiale Direct labor Overhead applied Job 120 $1,700 3,300 Job 121 Job 122 $7,300 $3,100 4,900 2,400 Total $12, 100 10,600 References 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.

Answer 1

Answer -

Journal Entries

	General journal	Debit ($)	Credit ($)
a.	Work in Process Inventory [working note - (1)] Raw materials inventory (To record direct materials used in production)	12100 -	- 12100
b.	Work in Process Inventory [working note - (1)] Wages Payable (To record direct labor used in production)	10600 -	- 10600
c.	Work in Process Inventory [working note - (1)] Factory overhead (To record overhead cost applied to production)	9540 -	- 9540
d.	Accounts Receivable Sales Revenue [Given in question] (To record the sale of Job 120)	$30000 -	- $30000
e.	Cost of Goods Sold [working note - (1)] Finished Goods Inventory (To record the cost of Job 120 sold)	22025 -	- 22025

# Working Note - (1) - Calculation of Cost of each Job -

	July Product Costs	Explanation	Job 120	Job 121	Job 122	Total
I.	Beginning Work in Process	$6100 + $4300 + $3655	$14055	-	-	$14055
II.	Direct materials	Given in question	$1700	$7300	$3100	$12100
III.	Direct labor	Given in question	$3300	$4900	$2400	$10600
IV.	Overhead applied	90% of Direct labor cost	$2970 [$3300 * 90%]	$4410 [$4900 * 90%]	$2160 [$2400 * 90%]	$9540
Total Cost		I + II + III + IV	$22025	$16610	$7660	$46295