Question

Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1, OCFF had two jobs in process with the following costs:        

Work in Process		Balance on 3/1
Job 33	$	6,000
Job 34		3,900
	$	9,900

Source documents revealed the following during March:         

	Materials Requisitions Forms					Labor Time Tickets			Status of Job at Month-End
Job 33		$	2,200			$	5,700		Completed and sold
Job 34			2,400				3,000		Completed, but not sold
Job 35			3,800				2,400		In process
Indirect			700				2,200
		$	9,100			$	13,300

The company applies overhead to products at a rate of 55 percent of direct labor cost.

Required:
Prepare journal entries to record the materials requisitions, labor costs, and applied overhead

Record the issuance of raw materials to production.

Record Oak Creek Furniture Factory’s payroll costs. Assume the direct labor is owed but not paid.

Record the application of manufacturing overhead to production.

Answer 1

Raw material inventory	9100
Accounts payable		9100
[ Material requisitioned]
Labor costs	13300
Wages payable		13300
[labor time tickets]
Work in progress	6105
Factory overhead		6105
[Overhead applied at 55% of direct labor costs]
Raw material inventory		9100
Work in progress	8400
Factory overhead	700
[Raw material issued to production]
Work in progress	11100
Factory overhead	2200
Labor costs		13300
[Labor costs assigned]