P2-3A Prepare entries for a job order cost system and cost of goods manufactured schedule

Case Inc. is a construction company specializing in custom patios. The patios are constructed of

concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2020,

the general ledger for Case Inc. contains the following data.

Raw Materials Inventory $4,200 Manufacturing Overhead Applied $32,640

Work in Process Inventory $5,540 Manufacturing Overhead Incurred $31,650

Subsidiary data for Work in Process Inventory on June 1 are as follows.

Job Cost Sheets

Customer Job

Cost Element Rodgers Stevens Linton

Direct materials $600 $800 $900

Direct labor 320 540 580

Manufacturing overhead 400 675 725

$1,320 $2,015 $2,205

During June, raw materials purchased on account were $4,900, and all wages were paid. Additional

overhead costs consisted of depreciation on equipment $900 and miscellaneous costs of $400 incurred

on account.

A summary of materials requisition slips and time tickets for June show the following.

Customer Job Materials Requisition slips Time tickets

Rodgers $800 $850

Koss 2000 800

Stevens 500 360

Linton 1300 1,200

Rodgers 300 390

$4,900 3,600

General use 1500 1,200

$6,400 $4,800

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for

customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $18,900.

Each customer paid in full.

Instructions

(a) Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred,

and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to

production; and (3) completion of jobs and sale of goods.

(b) Post the entries to Work in Process Inventory.

(c ) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.

(d) Prepare a cost of goods manufactured schedule for June.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

(a)(1) Journalize the June transactions for purchase of raw materials, factory labor costs incurred,

and manufacturing overhead costs incurred

Raw Materials Inventory 4,900

Accounts Payable 4,900

Factory Labor 4,800

Cash 4,800

Manufacturing Overhead 1,300

Accumulated Depreciation - Equipment 900

Accounts Payable 400

(a)(2) Journalize the June transactions for assignment of direct materials, labor, and overhead to production

Work in Proccess Inventory 4,900

Manufacturing Overhead 1,500

Raw Materials Inventory 6,400

Work in Process Inventory 3,600

Manufacturing Overhead 1,200

Factory Labor 4,800

Work in Process Inventory 4,500

Manufacturing Overhead 4,500

(a)(3) Journalize the June transactions for completion of jobs and sale of goods.

Fin Value

Account Value

Account Value

Account Value

Account Value

Account Value

(b) Post the entries to Work in Process Inventory.

Work in Process Inventory

6/1 Balance Value June Completed work Value

Direct Materials Value

Direct labor Value

Overhead applied Value

6/30 Balance ?

(c ) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.

6/30 balance in Work in Process Inventory Value

Unfinished Job (Koss)

Direct materials Value

Direct labor Value

Manufacturing overhead Value

?

(d) Prepare a cost of goods manufactured schedule for June.

CASE INC.

Cost of Goods Manufactured Schedule

For the Month Ended June 30, 2020

Work in process, June 1 Value

Direct materials used Value

Direct labor Value

Manufacturing overhead applied Value

Total manufacturing costs ?

Total cost of work in process ?

Less: Work in process, June 30 Value

Cost of goods manufactured ?

After you have completed P2-3A, consider the following additional question.

1. Assume that indirect labor and raw materials purchases changed to $1,400 and $6,800 respectively.

Also assume that overhead is applied at the rate of $1.50 per dollar of direct labor. The three

completed jobs were sold for $22,000 cash. Revise the journal entries to reflect these changes.