In: Accounting
Custom Cabinetry has one job in process (Job 120) as of June 30; at
that time, its job cost sheet reports direct materials of $8,900,
direct labor of $3,400, and applied overhead of $2,890. Custom
Cabinetry applies overhead at the rate of 85% of direct labor cost.
During July, Job 120 is sold (on account) for $26,000, Job 121 is
started and completed, and Job 122 is started and still in process
at the end of the month. Custom Cabinetry incurs the following
costs during July.
July Product Costs | Job 120 | Job 121 | Job 122 | Total | ||||||||
Direct materials | $ | 1,600 | $ | 8,600 | $ | 2,600 | $ | 12,800 | ||||
Direct labor | 2,900 | 4,800 | 3,400 | 11,100 | ||||||||
Overhead applied | ? | ? | ? | ? | ||||||||
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1. Prepare journal entries for the following in July.
2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory general ledger accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30.)
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The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.