Custom Floral, Inc., produces special-order artificial flower arrangements, so it uses a job…

Custom Floral, Inc., produces special-order artificial flower arrangements, so it uses a job order costing system. Overhead is applied at the rate of 80 percent of direct labor cost. The following is a list of transactions for June:

June 1

Purchased direct materials on account, $300.

2 Purchased indirect materials on account, $50.

 4 Requested direct materials costing $250 ($200 used on Job AX and $50 used on Job BY) and indirect materials costing $40 for production. 10 Paid the following overhead costs:

utilities, $40; manufacturing rent, $300; and maintenance charges, $10.

 15 Recorded the following gross wages and salaries for employees: direct labor, $1,000 ($700 for Job AX and $300 for Job BY); indirect labor, $300.

 15 Applied overhead to production.

16 Completed and transferred Job AX and Job BY to finished goods inventory; total cost of both jobs was $2,050.

20 Delivered Job AX to the customer; total production cost was $1,460 and billed customer for the sales price $2,000. 30 Recorded these overhead costs (adjusting entries): prepaid insurance expired, $30; and depreciation—machinery, $150.


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