Question

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2020, the general ledger for Case Inc. contains the following data. Raw Materials Inventory $4,300 Manufacturing Overhead Applied $30,800 Work in Process Inventory $5,450 Manufacturing Overhead Incurred $32,800 Subsidiary data for Work in Process Inventory on June 1 are as follows. Job Cost Sheets Customer Job Cost Element Rodgers Stevens Linton Direct materials $500 $900 $900 Direct labor 300 500 600 Manufacturing overhead 375 625 750 $1,175 $2,025 $2,250 During June, raw materials purchased on account were $5,400, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $1,000 and miscellaneous costs of $500 incurred on account. A summary of materials requisition slips and time tickets for June shows the following. Customer Job Materials Requisition Slips Time Tickets Rodgers $700 $900 Koss 2,200 700 Stevens 600 400 Linton 1,500 1,200 Rodgers 400 400 5,400 3,600 General use 1,400 1,000 $6,800 $4,600 Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $17,400. Each customer paid in full. a.Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods. b.Post the entries to Work in Process Inventory c.Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs d.Prepare a cost of goods manufactured schedule for June.

Answer 1

a.) JOURNAL ENTRIES

No.	ACCOUNT TITLE AND EXPLANATION	DEBIT $	CREDIT $
1	Raw material inventory	5,400
	Account payable		5,400
	(To record purchase of raw materials)
	Factory labor	4,600
	Cash		4,600
	(To record factory labor cost paid)
	Manufacturing overhead	1,500
	Accumulated depreciation-equipment		1,000
	Account payable		500
	(To record manufacturing overhead cost incurred)
2	Work in process inventory	5,400
	Manufacturing overhead	1,400
	Raw material inventory		6,800
	(To record assignment of material)
	Work in process inventory	3,600
	Manufacturing overhead	1,000
	Factory labor		4,600
	(To record assignment of factory labor)
	Work in process inventory	4,500
	Manufacturing overhead (3600*1.25)		4,500
	(To record assignment of manufacturing overhead)
3	Finished goods Inventory	15,175
	Work in process inventory		15,175
	(To record completion of jobs)
	Cash	17,400
	Sales revenue		17,400
	(To record sales)
	Cost of goods sold	15,175
	Finished goods		15,175
	(To record cost of goods sold)

b.) Work in Process Inventory

06/01	Beginning Balance	5,450	June	Finished goods inventory	15,175
	Raw material	5,400
	Factory labor	3,600
	Manufacturing overhead	4,500
06/30	End Balance	3,775

c.) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs

Cost of Unfinished jobs (Koss) = Direct Material + Direct Labour + Manufacturing Overhead

= $2,200 + $700 + ($700*$1.25)

= $3,775

d.) Cost of Goods Manufactured Schedule

Beginning work in process		5,450
Direct materials	5,400
Direct labor	3,600
Overhead applied	4,500
Total manufacturing costs		13,500
Total manufacturing costs & opening WIP		18,950
Less: Ending work in process inventory		(3,775)
Cost of Goods Manufactured		15,175

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