Question

S. Homework Saved Help Save & Exit Submit Check my work s one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,20o, applied overhead of $3.400. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost direct labor of $4,000, and During July, Job 120 is sold (o the end of the month. Custom Cabinetry incurs the following costs during July. n account) for $26,500, Job 121 is started and completed, and Job 122 is started and still in process at July Product Costs Job 120 Job 121 Job 122 Total Direct materials Direct labor Overhead applied $1,300 $7,200 $4,300 $12,800 3,600 4,300 2,600 10,500 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 KPrev3 of 3 Next>

Answer 1

Following are the journal entries

Transaction	general journal	debit	credit
a .	Work in process - job 120 Work in process - job 121 Work in process - job 122 Direct material or Rae material inventory (To direct material used )	1300 7200 4300	12800
b .	Work in process - job 120 Work in process - job 121 Work in process - job 122 Direct labour or factory payroll (To direct labor used )	3600 4300 2600	10500
c .	Work in process - job 120 (85% of 3600) Work in process - job 121 (85% of 4300) Work in process - job 122 (85% of 2600) Manufacturing overhead (To manufacturing overhead applied)	3060 3655 2210	8925
d .	Accounts receivable Cost of goods sold - job 120 (To sale of job 120)	26500	26500
e.	Cost of goods sold - job 120 Job 120 (Finished goods inventory ) (To cost of goods sold recorded)	21560	21560
e .

Note :-

Calculation of finished goods inventory for job 120

Cost incurred at wip level
Direct material	6200
Direct labor	4000
Manufacturing overhead	3400
Cost incurred during July
Direct material	1300
Direct labor	3600
Manufacturing overhead	3060
Total cost	$21560

Requirement 2 .

July 31 balances of work in process inventory and finished goods inventory will be aa aa follows :-

	Work in process	finished goods
Job #	121	122
Direct materials	7200	4300
Direct labor	4300	2600
Overhead	3655 (85% of 4300)	2210 (85% of 2600)
Total cost	$15155	$9110