Question

Check my work Custom Cabinetry has one job in process (Job 120) as of June 30, at that time, its job cost sheet reports direct materials of $6,300, direct labor of $4,200, and applied overhead of $3,570. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold on account) for $22.000, 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 July Product Costs Job 120 121 Job 122 Total Direct materials $1,500 $8,200 $3,200 $12,900 Direct labor 2.600 3,800 3,000 9,400 Overhead applied ? ? 2 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)

Answer 1

1
Transaction	General Journal	Debit	Credit
a	Work in process inventory	12900
	Raw materials inventory		12900
b	Work in process inventory	9400
	Factory wages payable		9400
c	Work in process inventory	7990		=9400*85%
	Factory overhead		7990
d	Accounts Receivable	22000
	Sales		22000
e	Cost of goods sold	20380		=(6300+4200+3570)+1500+2600+(2600*85%)
	Finished goods inventory		20380
2
	Work in Process	Finished goods
Job #	Job 122	Job 121
Direct materials	3200	8200
Direct labor	3000	3800
Overhead	2550	3230
Total cost	8750	15230