Problem:
Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June.
June 1 Purchased raw materials for $25,000 on account.
8 Raw materials requisitioned by production:
Direct materials $6,000
Indirect materials 1,000
15 Paid factory utilities, $2,100 and repairs for factory equipment, $3,000.
25 Incurred $72,000 of factory labor.
25 Time tickets indicated the following:
Direct Labor (4,000 hrs at $12 per hr) = $48,000
Indirect Labor (3,000 hrs at $8 per hr) = 24,000
$72,000
25 Applied manufacturing overhead to production based on a predetermined overhead rate of $9 per direct labor hour worked.
28 Goods costing $18,000 were completed in the factory and were transferred to finished goods.
30 Goods costing $15,000 were sold for $25,000 on account.