Custom cabinetry has one job in process (job 120) as of june 30; at that time, its job cost sheet reports direct materials of $8,700, direct labor of $3,800, and applied overhead of $3,230. custom cabinetry applies overhead at the rate of 85% of direct labor cost. during july, job 120 is sold (on account) for $23,500, job 121 is started and completed, and job 122 is started and still in process at the end of the month. custom cabinetry incurs the following costs during july. july product costs job 120 job 121 job 122 total direct materials $ 2,100 $ 6,400 $ 3,400 $ 11,900 direct labor 2,300 4,200 2,300 8,800 overhead applied ? ? ? ?

1. prepare journal entries for the following in july.
2. direct materials used in production.
3. direct labor used in production.
4. overhead applied. the sale of job 120.
e. cost of goods sold for job 120. 2.
compute the july 31 balances of the work in process inventory and the finished goods inventory general ledger accounts. (assume there are no jobs in finished goods inventory as of june 30.)

Answer and Explanation:

Cost Schedule:

Product Costs               Job 120    Job 121    Job 122   Total

Beginning WIP              15700                                        15700

Direct Materials             2100         6400       3400       11900

Direct Labor                   2300        4200       2300        8800

Overhead 85%              1955          3570       1955        7480

of Direct Labor

Total                               22055        14170       7655      43880

Jounral Entries

Work in Process Inventory                                                 11900

               Raw Materials Inventory                                                   11900

      To record materials in inventory

Work in Process Inventory                                                8800

              Wages Payable                                                               8800

     To record Labor cost

Work in Process Inventory                                                7480

            Applied Factory Overhead                                                 7480

      To record applied FOH

Accounts Receivable                                                         23,500

            Sales Revenue                                                                     23,500

  To record Job sold on account

Cost of Goods Sold (Job 120)                                              22055

           Finished goods                                                                    22055

   To record cost of goods sold

Ending Work in Process account = 7655

Ending Finished Good account = 14170

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