Fashion 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:

Required

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 Depreciation—Machinery, 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.

Transcribed Image Text:

June 1 2 4 10 15 15 Purchased direct materials on account, $500. Purchased indirect materials on account, $60. Requested direct materials costing $400 ($300 used on Job AA and $100 used on Job BB) and indirect materials costing $150 for production. Paid the following overhead costs: utilities, $60; manufacturing rent, $400; and maintenance charges, $40. Recorded the following gross wages and salaries for employees: direct labor, $1,200 ($800 for Job AA and $400 for Job BB); indirect labor, $300. Applied overhead to production. June 1 2 4 10 15 15 Purchased direct materials on account, $500. Purchased indirect materials on account, $60. Requested direct materials costing $400 ($300 used on Job AA and $100 used on Job BB) and indirect materials costing $150 for production. Paid the following overhead costs: utilities, $60; manufacturing rent, $400; and maintenance charges, $40. Recorded the following gross wages and salaries for employees: direct labor, $1,200 ($800 for Job AA and $400 for Job BB); indirect labor, $300. Applied overhead to production.

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Job Order Costing TAccounts Analysis Job Costing It is a method of cost accounting in which ... View the full answer