Question

Problem 16-3A

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		$ 4,662		Manufacturing Overhead Applied		$ 36,230
Work in Process Inventory		$ 6,149		Manufacturing Overhead Incurred		$ 35,132

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		$ 666		$ 888		$ 999
Direct labor		355		599		644
Manufacturing overhead		444		749		805
		$ 1,465		$ 2,236		$ 2,448

During June, raw materials purchased on account were $ 5,439 , and all wages were paid. Additional overhead costs consisted of depreciation on equipment $ 999 and miscellaneous costs of $ 444 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Customer Job		Materials Requisition Slips		Time Tickets
Rodgers		$ 888		$ 944
Koss		2,220		888
Stevens		555		400
Linton		1,443		1,332
Rodgers		333		433
		5,439		3,997
General use		1,665		1,332
		$ 7,104		$ 5,329

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 $ 20,979 . Each customer paid in full.

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. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 2,500.)

Answer 1

Date	Account	Debit	credit
1a	Raw material inventory	5439
	Accounts payable		5439
	[raw material purchased on account]
b	Factory labor	5329
	cash		5329
c	Manufacturing overhead	1443
	Accumulated depreciation		999
	Accounts payable		444
	[Manufacturing overhead incurred]
2	work in process	5439
	manufacturing overhead	1665
	Raw material inventory		7104
b	work in process	3997
	manufacturing overhead	1332
	Factory labor		5329
c	work in process	4996
	manufacturing overhead		4996
	[Overhead applied 3997*1.25]
3	cash	20979
	sales revenue		20979
b	cost of goods sold	16363
	Finished goods inventory		16363

cost of goods sold

	Beginning	Direct material	labor	overhead	Total
Rodgers	1465	888+333=1221	944+433=1377	1377*1.25=1721	5784
stevens	2236	555	400	400*1.25=500	3691
linton	2448	1443	1332	1332*1.25=1665	6888
					16363