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 2016 follow:

Raw Materials Inventory	$	15,600
Work in Process Inventory		7,000
Finished Goods Inventory		20,100

The following transactions occurred during January:
(a) Purchased materials on account for $26,500.
(b) Issued materials to production totaling $21,100, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials.
(c) Payroll costs totaling $17,900 were recorded as follows:
$11,400 for assembly workers
1,300 for factory supervision
2,000 for administrative personnel
3,200 for sales commissions
(d) Recorded depreciation: $6,000 for machines, $1,200 for the copier used in the administrative office.
(e) Recorded $1,600 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense.
(f) Paid $5,600 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 this job shows $2,300 for direct materials, $2,100 for direct labor, and $4,200 for applied overhead.
(i) Sold jobs costing $51,800. The revenue earned on these jobs was $67,340.

Required:
1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: (Post all amounts separately. Do not combine/add any dollar amounts when posting to the t-accounts.)

Raw Materials Inventory.

Work in Process Inventory.

Finished Goods Inventory.

Cost of Goods Sold.

Selling, General, and Administrative Expenses.

Sales Revenue.

Other accounts (Cash, Payables, etc.).

Answer rating: 100% (QA)

TAccounts for Christophers Custom Cabinet Company January 2016 1 Raw Materials Inventory Date Descri... View the full answer