The following transactions occurred in January at Dungan Cabinetry, a furniture maker that uses job costing:

1. Purchased $53,700 in materials on account.

2. Issued $1,500 in supplies from the materials inventory to the production department.

3. Paid for the materials purchased in (1).

4. Issued $25,500 in direct materials to the production department.

5. Incurred wage costs of $42,000, which were debited to Payroll, a temporary account. Of this amount, $13,500 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $28,500 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll.

6. Recognized $21,000 in fringe benefit costs, incurred as a result of the wages paid in (5). This $21,000 was debited to Payroll and credited to Fringe Benefits Payable.

7. Analyzed the Payroll account and determined that 60 percent represented direct labor; 30 percent, indirect manufacturing labor; and 10 percent, administrative and marketing costs.

8. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $32,400.

9. Applied overhead on the basis of 175 percent of direct labor costs.

10. Recognized depreciation of $17,250 on manufacturing property, plant, and equipment.

Required

a. Prepare journal entries to record these transactions.

b. The following balances appeared in the accounts of Dungan Cabinetry:

Prepare T-accounts to show the flow of costs during theperiod.

Transcribed Image Text:

Ending Materials Inventory Work-In-Process Inventory... .12,375 Finished Goods Inventory Cost of Goods Sold Beginning $55,575 62,250 $49,800 98,775