Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold.
Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter2: Accounting For Materials
Section: Chapter Questions
Problem 8P
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![Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs.
Inventory balances at the beginning of the current year follow:
Raw Materials Inventory
Work in Process Inventory
Finished Goods Inventory
$ 15,300
6,900
21,200
The following transactions occurred during January
a. Purchased materials on account for $27,900.
b. Issued materials to production totaling $21,400, 90 percent of which was traced to specific jobs and the remainder of which was
treated as indirect materials.
c. Payroll costs totaling $20,200 were recorded as follows:
$11,500 for assembly workers
$2,700 for factory supervision
$2,500 for administrative personnel
$3,500 for sales commissions
d. Recorded depreciation: $5,500 for factory machines, $600 for the copier used in the administrative office.
e. Recorded $1,600 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as
an administrative expense.
f. Paid $6,400 in other factory costs in cash.
g. Applied manufacturing overhead at a rate of 200 percent of direct labor cost.
h. Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,200 for direct materials, $2,200 for direct labor,
and $4,400 for applied overhead.
i. Sold jobs costing $52,000. The revenue earned on these jobs was $67,600.
Required:
1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following
accounts:
a. Raw Materials Inventory.
b. Work in Process Inventory.
c. Finished Goods Inventory.
d. Cost of Goods Sold.
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Transcribed Image Text:Christopher's Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs.
Inventory balances at the beginning of the current year follow:
Raw Materials Inventory
Work in Process Inventory
Finished Goods Inventory
$ 15,300
6,900
21,200
The following transactions occurred during January
a. Purchased materials on account for $27,900.
b. Issued materials to production totaling $21,400, 90 percent of which was traced to specific jobs and the remainder of which was
treated as indirect materials.
c. Payroll costs totaling $20,200 were recorded as follows:
$11,500 for assembly workers
$2,700 for factory supervision
$2,500 for administrative personnel
$3,500 for sales commissions
d. Recorded depreciation: $5,500 for factory machines, $600 for the copier used in the administrative office.
e. Recorded $1,600 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as
an administrative expense.
f. Paid $6,400 in other factory costs in cash.
g. Applied manufacturing overhead at a rate of 200 percent of direct labor cost.
h. Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,200 for direct materials, $2,200 for direct labor,
and $4,400 for applied overhead.
i. Sold jobs costing $52,000. The revenue earned on these jobs was $67,600.
Required:
1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following
accounts:
a. Raw Materials Inventory.
b. Work in Process Inventory.
c. Finished Goods Inventory.
d. Cost of Goods Sold.
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