Christopher\'s Custom Cabinet Company uses a job order cost system with overhead

Question

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 2016 follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $16,400 6,800 21,800 The following transactions occurred during January (a) Purchased materials on account for $26,700 (b) Issued materials to production totaling $21,200, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials (c) Payroll costs totaling $19,100 were recorded as follows: $11,900 for assembly workers 2,200 for factory supervision 2,500 for administrative personnel 2.500 for sales commissions (d) Recorded depreciation: $5,500 for machines, $1,400 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 ?Paid $5,400 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 this job shows $2,300 for direct materials, $2,100 for direct labor, and $4,200 for applied overhead ()Sold jobs costing $50,500. The revenue earned on these jobs was $65,650 Required 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: (Post all amounts separately. Do not combineladd any dollar amounts when posting to the t-accounts.)

Explanation / Answer

Answer 1. Raw Material Inevntory Work in Process Inventory Finished Goods Inventory Beg. Bal.            16,400            21,200 b. Beg. Bal.              6,800            52,980 h Beg. Bal.            21,800            50,500 i. a.            26,700 b.            19,080 h.            52,980 c(2)            11,900 g.            23,800 End. Bal.            21,900 End. Bal.              8,600 End. Bal.            24,280 Factory Payroll Factory Overhead Cost of Goods Sold Beg. Bal.                     -              19,100 c(2). Beg. Bal.                     -              23,800 g. Beg. Bal.                     -   c(1).            19,100 b.              2,120 i.            50,500 c(2)              2,200 d.              5,500 e.                  640 f.              5,400 End. Bal.                     -   End. Bal.              7,940 End. Bal.            50,500 Accounts Payable Selling, General & Admn. Exp. Sales Revenue Beg. Bal.                     -   Beg. Bal.                     -   Beg. Bal.                     -              26,700 a. c(2).              2,500            65,650 i. c(2).              2,500 d.              1,400 e.                  960 End. Bal.            26,700 End. Bal.              7,360 End. Bal.            65,650

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