Question

In: Accounting

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.

Problem 2-3A (Video)

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

 

$4,500

 

Manufacturing Overhead Applied

 

$35,900

Work in Process Inventory

 

$5,675

 

Manufacturing Overhead Incurred

 

$29,300


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

 

$600

 

$900

 

$800

Direct labor

 

300

 

600

 

600

Manufacturing overhead

 

375

 

750

 

750

   

$1,275

 

$2,250

 

$2,150


During June, raw materials purchased on account were $5,200, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $800 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

 

$800

 

$700

Koss

 

2,200

 

800

Stevens

 

400

 

300

Linton

 

1,500

 

1,300

Rodgers

 

300

 

300

   

5,200

 

3,400

General use

 

1,600

 

1,300

   

$6,800

 

$4,700


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 $18,000. Each customer paid in full.

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. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Post the entries to Work in Process Inventory. (Post the entries to Work in Process Inventory in the order presented in the problem.)

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

Prepare a cost of goods manufactured schedule for June.

Solutions

Expert Solution

Post the entries to Work in Process Inventory. (Post the entries to Work in Process Inventory in the order presented in the problem.)

Working in process Inventory

 

Date

Particular

Amount

Date

Particulars

 

Jun-1

Balance

5675

June

Completed work

14525

 

Direct materials

5200

 

 

 

 

Direct labor

3400

 

 

 

 

Overhead applied

4250

 

 

 

Jun-30

Balance

4000

 

 

 

 

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

Koss

 

Direct materials

2200

Direct labor

800

Manufacturing overhead

1000

 

4000

 

Prepare a cost of goods manufactured schedule for June.

CASE INC

Cost of Goods Manufactured Schedule

For the month ended June 30,2020

Work process June 1

 

5675

Direct materials used

5200

 

Direct labor

3400

 

Manufacturing Costs

4250

 

Total Manufacturing costs

 

12850

Total cost of work in process

 

18525

Less:

 

 

 Working in process June 30

 

4000

Cost of Goods Manufactured

 

14525

 


 

SOLUTION:

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. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Particulars

Debit

Credit

Raw Materials Inventory

5200

 

To Accounts Payable

 

5200

 

 

 

Factory Labor

4700

 

To Cash

 

4700

 

 

 

Manufacturing Overhead

1300

 

To Accumulated Depreciation-Equipment

 

800

To Accounts Payable

 

500

 

 

 

Work in Process Inventory

5200

 

Manufacturing Overhead

1600

 

To Raw Materials Inventory

 

6800

 

 

 

Work in Process Inventory

3400

 

Manufacturing Overhead

1300

 

To Factory Labor

 

4700

 

 

 

Work in Process Inventory

4250

 

To Manufacturing Overhead

 

4250

 

 

 

Finished Goods Inventory

14525

 

To Work in Process Inventory

 

14525

 

 

 

Cash

18000

 

To Sales Revenue

 

18000

 

 

 

Cost of Goods Sold

14525

 

To Finished Goods Inventory

 

14525

 

 

Post the entries to Work in Process Inventory. (Post the entries to Work in Process Inventory in the order presented in the problem.)

Working in process Inventory

 

Date

Particular

Amount

Date

Particulars

 

Jun-1

Balance

5675

June

Completed work

14525

 

Direct materials

5200

 

 

 

 

Direct labor

3400

 

 

 

 

Overhead applied

4250

 

 

 

Jun-30

Balance

4000

 

 

 

 

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

Koss

 

Direct materials

2200

Direct labor

800

Manufacturing overhead

1000

 

4000

 

Prepare a cost of goods manufactured schedule for June.

CASE INC

Cost of Goods Manufactured Schedule

For the month ended June 30,2020

Work process June 1

 

5675

Direct materials used

5200

 

Direct labor

3400

 

Manufacturing Costs

4250

 

Total Manufacturing costs

 

12850

Total cost of work in process

 

18525

Less:

 

 

 Working in process June 30

 

4000

Cost of Goods Manufactured

 

14525

 

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