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Better Air For You, Inc manufactures specialty air cleaning equipment for industrial complexes. Since the equipment is unique, Better Air designs each piece to
Better Air For You, Inc manufactures specialty air cleaning equipment for industrial complexes. Since the equipment is unique, Better Air designs each piece to customer specifications. The company uses a job-order cost system and applies overhead on the basis of machine hours using a predetermined overhead rate. For the year, budgeted manufacturing overhead is $6,750,000 and the expected activity level is 120,000 machine hours. Data regarding jobs in February are presented below. By the end of February 2021, all jobs but NM824 & TX825 were completed, and all completed jobs had been delivered to customers with the exception of AR987 and OR123. Balance Direct Direct Machine 1/31/2021 Materials Labor Hours CO456 $187,576 $68,657 $28,400 745 AR987 169,745 17,625 12,160 145 OR123 103,900 21,680 15,460 380 NM824 18,670 167,400 48,000 2,800 CA996 0 115,000 136,800 3,300 TX825 0 28,900 12,580 1,700 What is the journal entry for COGS for February? Cost of Goods sold (Debit) $763,964 Finished Goods (Credit) $763,964 O Finished Goods (Debit) $763,964 Cost of Goods Sold (Credit) $763,964 O Cost of Goods Sold (Debit) $370,101 Finished Goods (Credit) $370,101 O Finished Goods (Debit) $370,101 Cost of Goods Sold (credit) $370,101
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