Job Order Costing: T Account Analysis

Custom Floral, Inc., produces special-order artificial flower arrangements, so it uses a job order costing system. Overhead is applied at the rate of 80 percent of direct labor cost. The following is a list of transactions for June:

June 1 Purchased direct materials on account, $300.

2 Purchased indirect materials on account, $50.

4 Requested direct materials costing $250 ($200 used on Job AX and $50 used on Job BY) and indirect materials costing $40 for production.

10 Paid the following overhead costs: utilities, $40; manufacturing rent, $300; and maintenance charges, $10.

15 Recorded the following gross wages and salaries for employees: direct labor, $1,000 ($700 for Job AX and $300 for Job BY); indirect labor, $300.

15 Applied overhead to production.

16 Completed and transferred Job AX and Job BY to finished goods inventory; total cost of both jobs was $2,050.

20 Delivered Job AX to the customer; total production cost was $1,460 and billed customer for the sales price $2,000.

30 Recorded these overhead costs (adjusting entries): prepaid insurance expired, $30; and depreciationmachinery, $150.

1. Record the entries for all transactions in June using T accounts for the following: Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Overhead, Cash, Accounts Receivable, Prepaid Insurance, Accumulated DepreciationMachinery, Accounts Payable, Payroll Payable, Sales, and Cost of Goods Sold. Determine the partial account balances. Assume no beginning inventory balances. Also assume that when the payroll was recorded, entries were made to the Payroll Payable account.

2. Compute the amount of underapplied or overapplied overhead as of June 30 and transfer it to the Cost of Goods Sold account.

PLEASE EXPLAIN he foloowing T-Accounts: Materials Inventory, Work in Process Inventory, Overhead, Payroll Payable, and Cost of Goods Sold