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Christophers Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs
1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the fol
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1. T-accounts

Raw Materials Inventory Work in Process Inventory
Debit Credit Debit Credit
Beg. Bal. 16200 Beg. Bal. 6600
(a) 26300 21700 (b) (b) 19530
End. Bal. 20800 (c) 11000
(g) 22,000 49,430 (h)
End. Bal. 9700
Finished Goods Inventory Cost of Goods Sold (COGS)
Debit Credit Debit Credit
Beg. Bal. 20600 (i) 51800
(h) 49430 51800 (i)
End. Bal. 18230 End. Bal. 51800
Manufacturing Overhead Selling, General, Administrative Exp.
Debit Credit Debit Credit
(b) 2170 (c) 1000
(c) 1400 (c) 1800
(d) 6000 (d) 500
(e) 400 (e) 600
(f) 5800 22000 (g)
End. Bal. 6230 End. Bal. 3,900
Sales Revenue Other Accounts
Debit Credit Debit Credit
67340 (i) 26800 (a)
11000 (c)
End. Bal. 67340 1400 (c)
1000 (c)
1800 (c)
6000 (d)
500 (d)
1000 (e)
5800 (f)
End. Bal. 55300

2. Unadjusted gross profit = Sales revenue - Cost of goods sold = $67340 - $51800 = $15540

3. Manufacturing overhead $6230 underapplied

Actual overheads $15770 - Overheads applied $22000 = Overapplied overheads $6230

4. Adjusted gross profit = Sales revenue - Adjusted cost of goods sold = $67340 - $45570 = $21770

Adjusted cost of goods sold = Cost of goods sold $51800 - Overapplied overheads $6230 = $45570

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