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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
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 2018 follow: Raw Materials Inventory Work in Process Inventory $16,500 Finished Goods Inventory 5,400 20,500 The following transactions occurred during January: (a) Purchased materials on account for $27,500. (b) Issued materials to production totaling $22,000, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. (c) Payroll costs totaling $17,700 were recorded as follows: $11,400 for assembly workers 1,900 for factory supervision 2,300 for administrative personnel 2,100 for sales commissions (d) Recorded depreciation: $5,900 for factory machines, $500 for the copier used in the administrative office. (e) Recorded $1,300 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $5,100 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 the uncompleted job shows $2,300 for direct materials, $2,200 for direct labor, and $4,400 for applied overhead. (i) Sold jobs costing $50,300. The revenue earned on these jobs was $65,390.
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