3 of 3 Job Order Costing: T Account Analysis Custom Floral, Inc, produces specia

Question

3 of 3 Job Order Costing: T Account Analysis Custom Floral, Inc, produces special-order transactions for June: artificial flower arrangements, so it uses a job order costing system. Overhead is applied at the rate of 80 percent of direct labor cost. The following is a list of une 1 Purchased direct materials on account, $300 2 Purchased indirect materials on account, $50 4 Requested direct materials costing $250 ($200 used on Job AX and $50 used on Job BY) and indirect materials costing $40 for production 10 Paid the following averhead costs: ilities, $40; manufacturing rent, $300; and maintenance charges, $10. 15 Recorded the following gross wages and salaries for employees: direct labor, $1,000 ($700 for Job AX and $300 for Job BY); indirect labor ss0. $300. 15 Applied overhead to production 16 Completed and transferred 3ob AX and 3ob BY to finished goods inventory, total cost of both jobs was $2,050. 20 Delivered Job AX to the customer; total production cost was $1,460 and billed customer for the sales price $2,000. 30 Recorded these overhead costs (adjusting entries): prepaid insurance expired, $30; and depreciation-machinery, $150 for all transactions in June using T accounts for the following: Materials Inventory, Work in Process Inventory, Finished Goods Imventory, Overhead, Cash, Accounts Receivable, Prepaid nery, Accounts Payable, Payroll Payable, Sales, and Cost of Goods Sold. Determine the partial account balances. Assume no beginning inventory balances. Als Insurance, Accumulated D assume that when the payroll was recorded, entries were made to the Payroll Payable account 2. Compute the amount of underapplied or overappled overhead as of June 30 and transfer it to the Cost of Goods Sold account r no amount should be entered, please, enter zero ("0"). Enter the transactions in the same order they are provided in the list of transactions. chronologeal order. In case two transactions of the same date should be recorded using the same T account, enter them in 300 100

Explanation / Answer

2) Under applied overhead is tranferred to COGS A/C on June 30 by $70.

1) T-Accounts: DEBIT AMOUNT $ CREDIT AMOUNT$ Materials Inventory a/c: 1-Jun 300 4-Jun 250 2-Jun 50 4-Jun 40 cb 60 Accounts Payable a/c: cb 350 1-Jun 300 2-Jun 50 WIP Inventory a/c: 4-Jun 250 16-Jun 2050 15-Jun 1000 cb 0 15-Jun 800 Overhead a/c: 4-Jun 40 15-Jun 800 10-Jun 40 30-Jun 70 300 10 15-Jun 300 30-Jun 30 150 Payroll Payable a/c: cb 1300 15-Jun 1000 300 FG Inventory a/c: 16-Jun 2050 20-Jun 1460 cb 590 Sales a/c: 20-Jun 2000 AR a/c: 20-Jun 2000 COGS a/c: 20-Jun 1460 cb 1530 30-Jun 70 Prepaid Insurance a/c: 30-Jun 30 Dep - Machinery a/c: 30-Jun 150

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