Question

Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1, OCFF had two jobs in process with the following costs:

Work in Process		Balance on 3/1
Job 33	$	7,500
Job 34		6,000
	$	13,500

Source documents revealed the following during March:

	Materials Requisitions Forms					Labor Time Tickets			Status of Job at Month-End
Job 33		$	3,500			$	6,500		Completed and sold
Job 34			6,000				7,800		Completed, but not sold
Job 35			4,200				3,250		In process
Indirect			1,300				2,140
		$	15,000			$	19,690

The company applies overhead to products at a rate of 150 percent of direct labor cost.

Required:
Prepare journal entries to record the materials requisitions, labor costs, and applied overhead. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1Record the issuance of raw materials to production.

2Record Oak Creek Furniture Factory’s payroll costs. Assume the direct labor is owed but not paid.

3Record the application of manufacturing overhead to production.

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Letters (a)–(g) represent several recent transactions that were posted to some of Johnson Company’s T-accounts.  

Letters (a)–(g) represent several recent transactions that were posted to some of Johnson Company’s T-accounts.  

Raw Materials Inventory
(a)	(b)

Manufacturing Overhead
(c)	(e)

Work in Process Inventory
(b)	(f)
(d)
(e)

Finished Goods Inventory
(f)	(g)

Cost of Goods Sold
(g)

   
Required:
Assign letters (a)–(g) to the following descriptions to indicate how the transactions would be recorded in the T-accounts. The purchase of raw materials is provided as an example, where the letter (a) represents a debit to Raw Materials Inventory.

	Description Transaction Applied Manufacturing Overhead Recorded Direct Labor Recorded the Cost of Jobs Completed Purchased Raw Materials (a) Recorded Actual Manufacturing Overhead Recorded the Cost of a Jobs Sold Issued Raw Materials to Production

Answer 1

Transaction	General Journal	Debit	Credit		Description	Transaction
(a)	Work in process inventory	$        13,700			Applied Manufacturing Overhead	( e)
	Factory Overhead	$          1,300			Recorded Direct Labor	(d)
	Raw materials inventory		$        15,000		Recorded the Cost of Jobs Completed	(f)
					Purchased Raw Materials	(a)
(b)	Factory payroll	$        19,690			Recorded Actual Manufacturing Overhead	(c )
	Factory payroll payable		$        19,690		Recorded the Cost of a Jobs Sold	(g)
					Issued Raw Materials to Production	(b)
	Work in process inventory	$        17,550
	Factory Overhead	$          2,140
	Factory payroll		$        19,690
(c )	Work in process inventory	$        26,325
	Factory Overhead		$        26,325
	[(6500+7800+3250) x 150%]