Question

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.

Answer 1

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