Question

Exercise 15-5 Manufacturing cost flows LO P1, P2, P3 Custom Cabinetry has one job in process (Job 120) as of June 30, at that time, its job cost sheet reports direct materials of $8,300, direct labor of $3,900, and applied overhead of $3,510. Custom Cabinetry applies overhead at the rate of 90% 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 Direct materials Direct labor Overhead applied Job 120 $1,200 2.400 Job 121 $7,100 4,10 Job 122 $4, 3,50 Total $12,00 10,000 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 general ledger accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30) Complete this question by entering your answers in the tabs below. Required 1 Required 2

Answer 1

	Job sheet			job 120	job121	job122	Total
	Beginning bal
	Direct materials			8,300			8,300
	Direct labor			3,900			3,900
	applied overhead			3,510			3,510
	Total beginning bal			15,710			15,710
	cost added during the year
	Direct materials			1,200	7,100	4,000	12,300
	Direct labor			2,400	4,100	3,500	10,000
	applied overhead			2160	3690	3150	9000
	total cost added during the year			5,760	14890	10650	31,300
	total cost of job			21,470	14890	10650	47,010
1)	Journal entries
	No.	General Journal				Debit	Credit
	a.	Work in process inventory				12,300
		Raw materials inventory					12,300
	b.	Work in process inventory				10,000
		factory wages payable					10,000
	c.	work in process inventory				9,000
		Manufacturing overhead					9,000
	d.	Account receivable				22,000
		Sales					22,000
	e.	Cost of goods sold				21,470
		Finished goods inventory					21,470
2)		Work in process inventory
	Beg bal	15,710	Finished	36,360
	a.	12,300	goods
	b.	10,000
	c.	9,000
	End bal	10,650
		Finished goods inventory
	Beg.bal	0	COGS	21,470
	WIP	36,360
	End bal	14,890
				wip	finished
	Job#			122	121
	Direct materials			4,000	7,100
	direct labor			3,500	4,100
	overhead			3150	3690
	total			10,650	14,890