Question

Assume that indirect labor and raw materials purchases changed to $1,400 and $6,800 respectively.
	Also assume that overhead is applied at the rate of $1.50 per dollar of direct labor. The three
	completed jobs were sold for $22,000 cash. Revise the journal entries to reflect these changes.

(a)(1)	No.	Accounts	Debit	Credit
	1	Raw materials inventory	4900
		Accounts payable		4900
		(To record purchase of raw materials on account)
	2	Wages payable	4800
		Cash		4800
		(To record payment of wages)
	3	Manufacturing overhead	4000
		Accumulated depreciation-equipment		900
		Accounts payable		400
		Raw materials inventory		1500
		Wages expense		1200
		(To record manufacturing overheads incurred)
(a)(2)	1	Work in process inventory	13000
		Raw materials inventory		4900
		Wages expense		3600
		Manufacturing overhead		4500
		(To record assignment to production)
(a)(3)	1	Finished goods inventory	14740
		Work in process inventory		14740
		(To record completion of jobs)
	2	Cash	18900
		Sales revenue		18900
		(To record sales)
	3	Cost of goods sold	14740
		Finished goods inventory		14740
		(To record cost of sales)

(b)

Work in Process Inventory
6/1	Balance	5540	June	Completed work	14740
	Direct materials	4900
	Direct labor	3600
	Overhead applied	4500
6/30	Balance	3800

(c)

6/30 balance in Work in Process Inventory	3800
Unfinished Job (Koss)
Direct materials	2000
Direct labor	800
Manufacturing overhead	1000
	3800

(d)

CASE INC.
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2017
Work in process, June 1		5540
Direct materials used	4900
Direct labor	3600
Manufacturing overhead applied	4500
Total manufacturing costs		13000
Total cost of work in process		18540
Less: Work in process, June 30		3800
Cost of goods manufactured		14740

Workings:

Job Cost Sheets	Customer Job
	Rodgers	Stevens	Linton	Koss	Total
Beginning balance	1320	2015	2205	0	5540
Direct materials	1100	500	1300	2000	4900
Direct labor	1240	360	1200	800	3600
Manufacturing overhead	1550	450	1500	1000	4500
Total job cost $	5210	3325	6205	3800	18540

Answer 1

	a)(1)	No.	Accounts	Debit	Credit
		1	Raw materials inventory	6800
			Accounts payable		6800
			(To record purchase of raw materials on account)
		2	Wages payable	4800
			Cash		4800
			(To record payment of wages)
		3	Manufacturing overhead	4200
			Accumulated depreciation-equipment		900
			Accounts payable		400
			Raw materials inventory		1500
			Wages expense		1400
			(To record manufacturing overheads incurred)
	(a)(2)	1	Work in process inventory	13900
			Raw materials inventory		4900
			Wages expense		3600
			Manufacturing overhead		5400	1.5*direct labor	(3600*1,5)
			(To record assignment to production)
	(a)(3)	1	Finished goods inventory	14740
			Work in process inventory		14740
			(To record completion of jobs)
		2	Cash	22000
			Sales revenue		22000
			(To record sales)
		3	Cost of goods sold	14740
			Finished goods inventory		14740
			(To record cost of sales)
	(b)
	Work in Process Inventory
	1-Jun	Balance	5540	June	Completed work	14740
		Direct materials	4900
		Direct labor	3600
		Overhead applied	5400
	30-Jun	Balance	4700
	(c)
	6/30 balance in Work in Process Inventory	4700
	Unfinished Job (Koss)
	Direct materials	2000
	Direct labor	800
	Manufacturing overhead	1900
		4700
	(d)
	CASE INC.
	Cost of Goods Manufactured Schedule
	For the Month Ended June 30, 2017
	Work in process, June 1		5540
	Direct materials used	4900
	Direct labor	3600
	Manufacturing overhead applied	5400
	Total manufacturing costs		13900
	Total cost of work in process		19440
	Less: Work in process, June 30		4700
	Cost of goods manufactured		14740
	Workings:
	Job Cost Sheets	Customer Job
		Rodgers	Stevens	Linton	Koss	Total
	Beginning balance	1320	2015	2205	0	5540
	Direct materials	1100	500	1300	2000	4900
	Direct labor	1240	360	1200	800	3600
	Manufacturing overhead	1860	540	1800	1200	5400
	Total job cost $	5520	3415	6505	4000	19440