Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $8,100. direct labor of $4,100, and applied overhead of $3,485. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on credit) for $23,500, Job 121 is started and completed, and Job 122 is started and still in process at the end of July. Custom Cabinetry incurs the following costs during July. Job 120 $ 1,200 4,000 Job 121 $ 7,900 5,400 Job 122 $ 4,500 3,800 1. Prepare journal entries for the following July transactions and events a through e. Direct materials used Direct labor used a. Direct materials used. b. Direct labor used. c. Overhead applied. d. Sale of Job 120. e. Cost of goods sold for Job 120. Hint Job 120 has costs from June and July. 2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no jobs in Finished Goods Inventory at June 30.)
Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $8,100. direct labor of $4,100, and applied overhead of $3,485. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on credit) for $23,500, Job 121 is started and completed, and Job 122 is started and still in process at the end of July. Custom Cabinetry incurs the following costs during July. Job 120 $ 1,200 4,000 Job 121 $ 7,900 5,400 Job 122 $ 4,500 3,800 1. Prepare journal entries for the following July transactions and events a through e. Direct materials used Direct labor used a. Direct materials used. b. Direct labor used. c. Overhead applied. d. Sale of Job 120. e. Cost of goods sold for Job 120. Hint Job 120 has costs from June and July. 2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no jobs in Finished Goods Inventory at June 30.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
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Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no
jobs in Finished Goods Inventory at June 30.)
Work in Process Finished Goods
Job #
Direct materials
Direct labor
Overhead applied
Total cost
< Required 1
Required 2 >
Transcribed Image Text:Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $8,100.
direct labor of $4,100, and applied overhead of $3,485. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost.
During July, Job 120 is sold (on credit) for $23,500, Job 121 is started and completed, and Job 122 is started and still in process at the
end of July. Custom Cabinetry incurs the following costs during July.
Job 121
$ 7,990
5,400
1. Prepare journal entries for the following July transactions and events a through e.
a. Direct materials used.
b. Direct labor used.
c. Overhead applied.
d. Sale of Job 120.
e. Cost of goods sold for Job 120. Hint. Job 120 has costs from June and July.
Direct materials used
Direct labor used
2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no jobs
in Finished Goods Inventory at June 30.)
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
View transaction list
Job 120
$ 1,200
4,000
Prepare journal entries for the following July transactions and events a through e.
Journal entry worksheet
<
1
Transaction
a.
2 3 4 5
Record the entry to assign direct materials to job.
Note: Enter debits before credits.
Job 122
$4,500
3,800
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
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