Answer:
Cairle Company
1. The predetermined overhead rate based on direct labor cost is:
= 75% of direct labor cost.
2. August 31 Ending Balances:
Job 70 $7,475  
Job 71 $7,960
Job 72 $9,825
Job 73 $8,150  
Job 74 $1,350
Job 75 $2,065
Job 76 $384
3. Ending balance of Work in Process, August 31:
= $9,694
4. The cost of goods sold for August = $11,890
5. Sales revenue for August = $14,268
Explanation:
a) Data and Calculations:
Work in process inventory on August 1:
                                Job 70  Job 71  Job 72  Job 73  Job 74  Job 75  Job 76
Direct materials     $1,600  $2,000     $850 
Direct labor              1,900     1,300       900 
Applied overhead    1,425       975       675
Direct materials       $800   $1,235 $3,550 $5,000   $300     $560     $80 
Direct labor              1,000     1,400   2,200     1,800     600       860      172
Applied overhead      750     1,050    1,650     1,350     450       645      129
Total costs            $7,475  $7,960 $9,825   $8,150 $1,350 $2,065   $384
Work in Process:
Job 71 $7,960
Job 74   1,350
Job 76     384
Total  $9,694
Cost of goods sold:
Job 72 $9,825
Job 75 $2,065
Total    $11,890
Sales revenue = $14,268 ($11,890 * 1.20)