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Ciarra’s Custom Coats uses a Job Order Costing System. Record the appropriate journal entries for the...

Ciarra’s Custom Coats uses a Job Order Costing System. Record the appropriate journal entries for the following job:

7-1: Hailey Bieber ordered a custom coat.

7-2: 20 yards of wool recquesitioned from the warehouse. The wool cost $200 per yard.

7-2 / 7-10: The Factory works on the Coat. Direct Labor charged 30 hours at $100 per hour. Manufacturing Overhead is allocated based on direct labor hours. The predetermined overhead rate is $50 per direct labor hour.

7-11: The coat is finished and moved to the showroom.

7-12: The coat is delivered to Hailey Baldwin and she is billed $10,000.

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Expert Solution

Account title Debit Credit
7-2 WIP control A/c (20 * $200) 4000
Raw Materials control a/c 4000
(Recording the use of 20 yards of wool in production)
7-2 Direct Labor Control a/c 3000
Wages Payable (30 * $100) 3000
(Recording the wage expenses incurred)
WIP control A/c 3000
Direct Labor Control a/c 3000
(Transfer of direct labor to WIP a/c)
7-2/7-10 Manufacturing overheads a/c 1500
Cash 1500
(To record the overheads incurred)
WIP control A/c (30 * $50) 1500
Manufacturing overheads a/c 1500
(Recording overhead applied at $50 per direct labor hour)
7-11 Finished Goods a/c 8500
WIP control A/c 8500
(Record completion of Coat )
7-12 Accounts Receivable 10,000
   Sales 10,000
Record sale of coat for $10,000 on account  
Cost of goods sold 8,500
   Finished Goods Inventory 8,500
Record total cost of Coat sold now

ekkarill92 answered 1 year ago
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