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 $8,600, direct labor of $3,000, and applied overhead of $2.400. 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 Job 120 Direct materials $1,100 Direct labor 2,700 Overhead applied ? Job 121 $6,200 4,500 Job 122 $2,600 3,000 Total $ 9,900 10,200 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. Assume 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 2 Prepare journal entries for the above transactions in July View transaction list

Answer 1

July Product Costs Direct Materials Direct Labour Overhead applied = 80% of DL Job 120 $ 1,100.00 $ 2,700.00 $ 2,160.00 Job 121 $ 6,200.00 $ 4,500.00 $ 3,600.00 Job 122 $2,600.00 $3,000.00 $2,400.00 Total $ 9,900.00 $ 10,200.00 $ 8,160.00 $ 5,960.00 $ 14,300.00 $8,000.00 $ 28,260.00 Requirement 1 Transaction Credit General Journal Work in process inventory Raw Material Inventory Debit $ 9,900.00 $ 9,900.00 (To Record Direct material used in production) $ 10,200.00 Work in process inventory Factory Payroll Payable $ 10,200.00 (To Record DL used in Production) $ 8,160.00 Work in process inventory Factory Overhead $ 8,160.00 (To Record Overhead applied) $ 31,500.00 Accounts Receivable Sales $ 31,500.00 (To Record sale of job 120) $ 19,960.00 Cost of goods sold (8600+3000+2400+5960) Finished Goods inventory $ 19,960.00 (To Record cost of goods sold) Requirement 2 Work in progress Job Direct Materials $ Direct Labour $ Overhead applied $ 122 2,600.00 3,000.00 2,400.00 Finished Goods 121 $ 6,200.00 $ 4,500.00 $ 3,600.00 Total Cost 8,000.00 $ 14,300.00