Exercise 7-21 Assigning Costs to Jobs (LO 7-1, 2) The following transactions occ

Question

Exercise 7-21 Assigning Costs to Jobs (LO 7-1, 2) The following transactions occurred in April at Steve's Cabinets, a custom cabinet firm 1. Purchased $80,000 of materials on account. 2. Issued $4,000 of supplies from the materials inventory 3. Purchased $56,000 of materials on account. 4. Paid for the materials purchased in transaction (1) using cash 5. Issued $68,000 in direct materials to the production department. 6. Incurred direct labor costs of $100,000, which were credited to Wages Payable 7. Paid $106,000 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant. 8. Applied overhead on the basis of 125 percent of $100,000 direct labor costs 9. Recognized depreciation on manufacturing property, plant, and equipment of $50,000 The following balances appeared in the accounts of Steve's Cabinets for April Beginning Ending $148,200 33,000 Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold 166,000 $143,200 263,400

Explanation / Answer

work in process inventory beg bal 33,000 5 68,000 240,600 finished goods 6 100,000 8 125,000 End bal 85,400 finished goods inventory beg bal 166,000 goods 263,400 Transfer to completed 240,600 cost of goods sold ending 143,200 cost of goods sold Beg bal 0 finished 263,400 goods End bal 263,400

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