Question

What is/are the correct journal entry(ies) to record the completion and billing of the following job?...

What is/are the correct journal entry(ies) to record the completion and billing of the following job?

Direct Materials

$4,000

Direct Labor:

$1,500

Packaging Materials:

$100

Packaging and shipping labor:

$90

Overhead rate:

$20/labor hour

Wages rate:

$15/hr.

Sales price:

150% of Cost of Goods Sold
Business   Accounting   
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Homework Answers

Answer #1

Cost of Goods Sold = Direct Materials +packaging material+ Direct Labor + Packaging and Shipping labor+overhead

Direct labor included packing and shipping labor

Direct labor hours= direct labor cost/wages rate

Direct Labor hours = $1,590 / $15 = 106.00 hours

Overhead allocated = direct labor hours* overhead rate

Overhead Allocated = 106 hours x $20 perbdirect labor hour = $2,120.00

Costof Goods Sold = 4000.00+100.00+1500.00+90.00+2120.00

=7810.00

Sale revenue = 150% on cost of goods sold

Sales revenue= $7,810 x 150% = $11,715.00

Entries below:

Accounts Receivable debit = 11,715.00

SalesRevenue credit= 11715.00

Cost of Goods Sold debit=7,810.00

FinishedGoods Inventory credit =7810.00

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