Fundamentals of Cost Accounting: P7-43 The following transactions occurred in January at Dungan
Fundamentals of Cost Accounting P7-43 Tracing costs in a Job Company The following transactions occurred in January at Dungan Cabinetry, a furniture maker that uses job costing: 1. Purchased $53,900 in materials on account. 2. Issued $1,700 in supplies from the materials inventory to the production department. 3. Paid for the materials purchased in (1). 4. Issued $25,700 in direct materials to the production department. 5. Incurred wage costs of $44,000, which were debited to Payroll, a temporary account. Of this amount, $13,700 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $30,300 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. 6. Recognized $23,000 in fringe benefit costs, incurred as a result of the wages paid in (5). This $23,000 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 $32,600. 9. Applied overhead on the basis of 165 percent of direct labor costs. 10. Recognized depreciation of $17,450 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. The following balances appeared in the accounts of Dungan Cabinetry: Beginning Ending Materials Inventory 55,875 - Work-in-Process Inventory 12,675 - Finished Goods Inventory 62,450 50,200 Cost of Goods Sold - 99,775 Prepare T-accounts to show the flow of costs during the period.
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