Exercise 15-5 Manufacturing cost flows LO P1, P2, P3 Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,200, direct labor of $4,500, and applied overhead of $3,600. Custom Cabinetry applies overhead at the rate of 80% of direct labor cost. During July, Job 120 is sold (on account) for $25,500, 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 Direct materials Direct labor Overhead applied Job 120 $1,900 2,400 Job 121 $6,200 3,900 ? Job 122 $2,800 2,700 Total $ 10,900 9,000 ? ? ? 1. Prepare journal entries for the following in July. a. Direct materials used in production. b. Direct labor used in production. c. Overhead applied. d. 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 accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30.) Prepare journal entries for the above transactions in July. No Transaction General Journal Debit Credit 1 a. 1,900 6,200 Work in process inventory Work in process inventory Work in process inventory Raw materials inventory XX 2,800 x 10,900 2 b. Work in process inventory Work in process inventory Work in process inventory Factory wages payable 2,400 X 3,900 X 2,700 9,000 X 3 C. 1,920 Work in process inventory Work in process inventory Work in process inventory Factory overhead 3,120 2,160 X x 7,200 X 4 d. Accounts receivable 25,500 Sales 25,500 5 e. 20,520 Cost of goods sold Work in process inventory 20,520 Required 1 Required 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.) Work in Process Job 121 x Finished Goods Job 122 X Job # Direct materials Direct labor $ 6,200 X $ 2,800 x 2,700 X Overhead 3,900 X 3,120 13,220 2,160 7,660 Total cost $