Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

تمرين 31

Tracing Costs in a Job Company
The following transactions occurred in January at Klemstine Cabinetry, a furniture maker that uses job costing:
1. Purchased $35,800 in materials on account.
2. Issued $1,000 in supplies from the materials inventory to the production department.
3. Paid for the materials purchased in (1).
4. Issued $17,000 in direct materials to the production department.
5. Incurred wage costs of $28,000, which were debited to Payroll, a temporary account. Of this amount, $9,000 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $19,000 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll.
6. Recognized $14,000 in fringe benefit costs, incurred as a result of the wages paid in (5). This $14,000 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 $21,600.
9. Applied overhead on the basis of 175 percent of direct labor costs.
10. Recognized depreciation of $11,500 on manufacturing property, plant, and equipment.
Required
a. Prepare journal entries to record these transactions.
b. The following balances appeared in the accounts of Klemstine Cabinetry:

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