Question

P15-3A Prepare entries for a job order cost system and cost of goods manufactured schedule
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, 2017,
the general ledger for Case Inc. contains the following data.
Raw Materials Inventory			$4,200		Manufacturing Overhead Applied			$32,640
Work in Process Inventory			$5,540		Manufacturing Overhead Incurred			$31,650
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		$800		$900
	Direct labor		320		540		580
	Manufacturing overhead		400		675		725
			$1,320		$2,015		$2,205
During June, raw materials purchased on account were $4,900, and all wages were paid. Additional
overhead costs consisted of depreciation on equipment $900 and miscellaneous costs of $400 incurred
on account.
A summary of materials requisition slips and time tickets for June show the following.
	Customer Job		Materials Requisition slips		Time tickets
	Rodgers		$             800		$850
	Koss		2,000		800
	Stevens		500		360
	Linton		1,300		1,200
	Rodgers		300		390
			4,900		3,600
	General use		1,500		1,200
			$          6,400		$4,800
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 $18,900.
Each customer paid in full.
Instructions
(a)	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.
(b)	Post the entries to Work in Process Inventory.
(c )	Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
(d)	Prepare a cost of goods manufactured schedule for June.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a)(1)	Journalize the June transactions for purchase of raw materials, factory labor costs incurred,
	and manufacturing overhead costs incurred
	Account				Value
		Account					Value
	Account				Value
		Account					Value
	Account				Value
		Account					Value
		Account					Value
(a)(2)	Journalize the June transactions for assignment of direct materials, labor, and overhead to production
	Account				Value
	Account				Value
		Account					Value
	Account				Value
	Account				Value
		Account					Value
	Account				Value
		Account					Value
(a)(3)	Journalize the June transactions for completion of jobs and sale of goods.
	Account				Value
		Account					Value
	Account				Value
		Account					Value
	Account				Value
		Account					Value
(b)	Post the entries to Work in Process Inventory.
	Work in Process Inventory
	6/1	Balance	Value	June	Completed work		Value
		Direct Materials	Value
		Direct labor	Value
		Overhead applied	Value
	6/30	Balance	?
(c )	Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
	6/30 balance in Work in Process Inventory				Value
	Unfinished Job (Koss)
	Direct materials				Value
	Direct labor				Value
	Manufacturing overhead				Value
					?
(d)	Prepare a cost of goods manufactured schedule for June.
	CASE INC.
	Cost of Goods Manufactured Schedule
	For the Month Ended June 30, 2017
	Work in process, June 1						Value
	Direct materials used				Value
	Direct labor				Value
	Manufacturing overhead applied				Value
	Total manufacturing costs						?
	Total cost of work in process						?
	Less: Work in process, June 30						Value
	Cost of goods manufactured						?
After you have completed, answer additional question.
1.	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.

Answer 1

(a)(1)
No.	Accounts	Debit	Credit
1	Raw materials inventory	$4,900.00
	Accounts payable		$4,900.00
	(To record purchase of raw materials on account)
2	Wages payable	$4,800.00
	Cash		$4,800.00
	(To record payment of wages)
3	Manufacturing overhead	$1,300.00
	Accumulated depreciation-equipment		$900.00
	Accounts payable		$400.00
	(To record manufacturing overheads incurred)
(a)(3)
1	Work in process inventory	$4,900.00
	Manufacturing overhead	$1,500.00
	Raw materials inventory		$6,400.00
2	Work in process inventory	$3,600.00
	Manufacturing overhead	$1,200.00
	Factory Labor		$4,800.00
3	Work in process inventory ($3600 x 1.25)	$4,500.00
	Manufacturing overhead		$4,500.00
(a)(3)
1	Finished goods inventory	$13,562.50
	Work in process inventory		$13,562.50
	(To record completion of jobs)
2	Cash	$18,900.00
	Sales revenue		$18,900.00
	(To record sales)
3	Cost of goods sold	$13,562.50
	Finished goods inventory		$13,562.50
	(To record cost of sales)
	Finished Goods Inventory	DM	DL	MO	Total
	Rodgers	$1,400.00	$1,170.00	$1,462.50	$4,032.50
	Steven	$1,300.00	$900.00	$1,125.00	$3,325.00
	Linton	$2,200.00	$1,780.00	$2,225.00	$6,205.00
	Total				$13,562.50
(b)
Work in Process Inventory
6/1	Balance	$5,540.00	June	Completed work	$13,562.50
	Direct materials	$4,900.00
	Direct labor	$3,600.00
	Overhead applied	$4,500.00
6/30	Balance	$4,977.50