Question

Jenkins Company uses a job order cost system with overhead applied to jobs on the basis of direct labor hours. The direct labor rate is $20 per hour, and the predetermined overhead rate is $15 per direct labor hour. The company worked on three jobs during April. Jobs A and B were in process at the beginning of April. Job A was completed and delivered to the customer. Job B was completed during April, but not sold. Job C was started during April, but not completed. The job cost sheets revealed the following costs for April:

Answer 1

Question Completion:

                                                               Job A      Job B      Job C

Cost of Jobs in Process, 4/1/2013        $12,700   $1,100      $?  

Direct Materials Used                              2,700    9,400       11,100  

Direct Labor                                             11,400    9,400       3,700  

Applied Manufacturing Overhead            ?             ?             ?  

Required:

If no other jobs were started, completed, or sold, determine the balance in each of the following accounts at the end of April:

A: Work In Process

B. Finished Goods

C. Cost of Goods Sold

Answer:

Jenkins Company

The balance in each of the following accounts at the end of April:

A: Work In Process = $17,575

B. Finished Goods = $26,950

C. Cost of Goods Sold = $35,350

Explanation:

a) Data and Calculations:

                                                               Job A         Job B         Job C

Cost of Jobs in Process, 4/1/2013        $12,700      $1,100         $?  

Direct Materials Used                              2,700       9,400        11,100  

Direct Labor                                             11,400       9,400        3,700  

Applied Manufacturing Overhead          8,550       7,050        2,775

Total manufacturing costs                  $35,350 $26,950  $17,575

Direct labor hours                                  570         470           185

Direct labor rate = $20 per hour

Predetermined overhead rate = $1`5

A: Work In Process = Job C = $17,575

B. Finished Goods = Job B = $26,950

C. Cost of Goods Sold = Job A = $35,350