Answer:
Custom Cabinetry
Journal Entries:
a. Debit Work in Process:
Job 120 $1,000
Job 121 $6,000
Job 122 $2,500
Credit Materials $9,500
To record the materials used in production.
b. Debit Work in Process:
Job 120 $2,200
Job 121 $3,700
Job 122 $2,100
Credit Payroll $8,000
To record the direct labor used in production.
c. Debit Work in Process:
Job 120 $1,760
Job 121 $2,960
Job 122 $1,680
Credit Manufacturing Overhead $6,400
To record the overhead applied (80% of direct labor cost).
d. Debit Cash $22,000
Credit Sales Revenue $22,000
To record the sale of Job 120.
e. Debit Cost of goods sold $16,000
Credit Finished Goods $16,000
To record the cost of Job 120 sold.
2. July 31 Balances of Work in Process Inventory and the Finished Goods Inventory:
Work in Process:
Job 122 $6,280
Finished Goods Inventory:
Job 121 $12,660
Explanation:
a) Data and Calculations:
June 30, Job 120 in Process:
Direct materials = $6,000
Direct labor 2,800
Overhead 2,240
Overhead rate = 80% of direct labor cost
July:
Sale of Job 120 = $22,000
Costs incurred during July:
Product Costs Job 120 Job 121 Job 122 Total
Direct materials $1,000 $6,000 $2,500 $9,500
Direct labor 2,200 3,700 2,100 8,000
Overhead applied 1,760 2,960 1,680 6,400
Job Sheets:
Product Costs Job 120 Job 121 Job 122 Total
Beginning WIP $11,040 $11,040
Direct materials 1,000 $6,000 $2,500 9,500
Direct labor 2,200 3,700 2,100 8,000
Overhead applied 1,760 2,960 1,680 6,400
Total costs $16,000 $12,660 $6,280 $34,940
