Job Cost Journal Entries and T Accounts

Following are certain operating data for Redwood Manufacturing Company for January.

Materials Inventory Work in Process Inventory Finished Goods Inventory

Beginning inventory $$48,000$ $$60,000$ $$96,000$

Ending inventory $84,00072,00067,200$

Total sales were $$2,400,000,$ on which the company earned a $40\%$ gross profit. Redwood uses a predetermined manufacturing overhead rate of $110\%$ of direct labor costs. Manufacturing overhead applied was $$475,200.$ Exclusive of indirect material used, total manufacturing overhead incurred was $$360,000$ it was under$-$applied by $$28,800.$

Required

Compute the following items. $($Set up T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, and Manufacturing Overhead; fill in the known amounts; and then use the normal relationships among the various accounts to compute the unknown amounts.$)$

Cost of goods sold.

Cost of goods manufactured.

Direct labor incurred

Direct material used.

Indirect material used.

Total materials purchased.

Materials Inventory

Beg. bal.

$48,000$

Answer

$($d$)$

$($f$)$ Answer

Answer

$($e$)$

End. bal. Answer

Work in Process Inventory

Beg. bal.

$60,000$

Answer

$($b$)$

$($c$)$ Answer

$($d$)$ Answer

Answer

End. bal. Answer

Manufacturing Overhead

Beg. bal.

$0$

Answer

Answer

$($e$)$ Answer

End. bal. Answer

Finished Goods Inventory

Beg. bal.

$96,000$

Answer

$($a$)$

$($b$)$ Answer

End. bal. Answer