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 $8,700, direct labor of $3,900, and applied overhead of $3,120. Custom Cabinetry applies overhead at the rate of 80% of direct labor cost. During July, Job 120 is sold (on account) for $30,500, 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			Job 121			Job 122			Total
Direct materials	$	1,600		$	8,200		$	3,700		$	13,500
Direct labor		2,600			4,600			2,700			9,900
Overhead applied		?			?			?			?

1. Prepare journal entries for the following in July.

1. Direct materials used in production.
2. Direct labor used in production.
3. Overhead applied.
4. The sale of Job 120.
5. 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.)

Answer 1

121 Job 122 Cosl-sheet Job Job Total 120 Begending cost 15,720 Current Cost: material 1600 8,200 3700 13,500 laboo 2600 4600 2,700 9.900 on applied @8541 of laboocost 2,210 3,910 2,295 8,415 Total cost 22,130 16,710 8,695 31,815 Status SOLD | FINTSHED WIP 1. Journcel Cotoles SNO Accouot He explana ons Dmit($) COAH ($) Ta wOok in process roventooy AIC DO 13,500 TO Raw material Poventooy Alc 13,500 26 Wool Po process Proventory ALCOO 9,900 9,900 TO wages payable Alc 30 6001 Po poocess Povertory AI DO 8,415 8,415 To maofactuding oorheads Ald 4d Accounts pece sobie AIC DO 30,500 To Soles Wrence Alc 30,500 e cost of goods sold Al oo 22130 TD APOPshed goods AC 22,130 2. Boecance of CTD @ Poighed goods: Flooshed goods C Job 121) : $ 16710 WOOL a poocess C106122): 8,975