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 $3,800, and applied overhead of $3,230. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $23,500, 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 $ 2,100 $ 6,400 $ 3,400 $ 11,900 Direct labor 2,300 4,200 2,300 8,800 Overhead applied ? ? ? ?

1. Prepare journal entries for the following in July.
2. Direct materials used in production.
3. Direct labor used in production.
4. Overhead applied. 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.)

Question

nate5261 nate5261

21-12-2019
Business

contestada

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 $3,800, and applied overhead of $3,230. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $23,500, 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 $ 2,100 $ 6,400 $ 3,400 $ 11,900 Direct labor 2,300 4,200 2,300 8,800 Overhead applied ? ? ? ?

1. Prepare journal entries for the following in July.
2. Direct materials used in production.
3. Direct labor used in production.
4. Overhead applied. 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.)

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shaikhrabi shaikhrabi · Answer 1 · 2019-12-22T07:58:13+01:00

Answer and Explanation:

Cost Schedule:

Product Costs Job 120 Job 121 Job 122 Total

Beginning WIP 15700 15700

Direct Materials 2100 6400 3400 11900

Direct Labor 2300 4200 2300 8800

Overhead 85% 1955 3570 1955 7480

of Direct Labor

Total 22055 14170 7655 43880

Jounral Entries

Work in Process Inventory 11900

Raw Materials Inventory 11900

To record materials in inventory

Work in Process Inventory 8800

Wages Payable 8800

To record Labor cost

Work in Process Inventory 7480

Applied Factory Overhead 7480

To record applied FOH

Accounts Receivable 23,500

Sales Revenue 23,500

To record Job sold on account

Cost of Goods Sold (Job 120) 22055

Finished goods 22055

To record cost of goods sold

Ending Work in Process account = 7655

Ending Finished Good account = 14170

anthougo anthougo · Answer 2 · 2022-02-22T15:21:45+01:00

1. The preparation of the following journal entries for Custom Cabinetry is as follows:

a. Direct materials used in production:

Debit Work in Process:

Job 120 $ 2,100

Job 121 $ 6,400

Job 122 $ 3,400

Credit Raw materials $ 11,900

b. Direct labor used in production:

Debit Work in Process:

Job 120 $ 2,300

Job 121 $ 4,200

Job 122 $ 2,300

Credit Direct labor $ 8,800

c. Overhead Applied:

Debit Work in Process:

Job 120 $ 1,955

Job 121 $ 3,570

Job 122 $ 1,955

Credit Manufacturing overhead $ 7,480

d. The sale of Job 120:

Debit Accounts Receivable $23,500

Credit Sales Revenue $23,500

e. Cost of goods sold for Job 120:

Debit Cost of goods sold $22,085

Credit Sales Revenue $22,085

2. The July 31 balances of the following general ledger accounts follow (see Cost Sheets above):

1. Work in Process Inventory is $7,655, for Job 122.

2. Finished Goods Inventory is $14,170, for Job 121.

Transaction Analysis:

June 30 Balances:

Job 120

Direct materials = $8,700

Direct labor = $3,800

Applied overhead = $3,230

Total inventory of Job 120 = $15,730

Overhead application rate = 85% of direct labor cost

Sales of Job 120 = $23,500

Cost Sheets:

Product Costs Job 120 Job 121 Job 122 Total

Work in process $15,730 $15,730

Costs during July:

Direct materials $ 2,100 $ 6,400 $ 3,400 $ 11,900

Direct labor 2,300 4,200 2,300 8,800

Overhead applied 1,955 3,570 1,955 7,480

Total costs $22,085 $14,170 $7,655 $43,910

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