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:

Question

Workin Process Balance on 3/1Job 33 $ 6,000Job 34 3,600$ 9,600Source documents revealed the following during March: Materials Requisitions Forms Labor TimeTickets Status of Job at Month-EndJob 33 $ 2,800 $ 5,900 Completed and soldJob 34 2,300 4,000 Completed, but not soldJob 35 3,600 3,800 In processIndirect 800 2,000 $ 9,500 $ 15,700 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. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)1Record the issuance of raw materials to production.2Record Oak Creek Furniture Factory’s payroll costs.

Answer 1

Answer:
The Journal entries are as follows:
(i) Work in process inventory[9,500 - 800] A/c Dr. $8,700
Manufacturing overhead A/c Dr. $800
To Raw materials inventory $9,500
(To record the issuance of raw materials to production)
(ii) Work in process inventory[15,700 - 2,000] A/c Dr. $13,700
Manufacturing overhead A/c Dr. $2,000
To wages payable $15,700
(To record the Oak Creek Furniture Factory’s payroll costs)
(iii) Work in process inventory [13,700 × 55%] A/c Dr. $7,535
To Manufacturing overhead A/c $7,535
(To record the application of manufacturing overhead to production)