Angry Birds, Inc. designs and builds retaining walls for individual customers. On August 1, 2 jobs...

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Answer 1

Answer #1

(AMT IN $)

THE AMOUNT OF MOH APPLIED TO ALL JOBS

PARTICULARS	LEVEL 1	LEVEL 2	LEVEL 3	LEVEL 4	TOTAL
DIRECT LABOR COST (a)	1800	4800	360	1200	8160
DIRECT LABOR COST PER HOUR (b)	10	10	10	10	10
DIRECT LABOR HOUR (C) = (a) / (b)	180	480	36	120	816
MOH APPLIED TO JOBS @ $9 PER LABOR HOUR	1620	4320	324	1080	7344

UNDER OR OVER ABSORBED MOH

ACTUAL MOH INCURRED	8200
MOH ABSORBED / APPLIED	7344
UNDER ABSORBED MOH	856

CLOSING WORK IN PROCESS

PARTICULARS	LEVEL 3	LEVEL 4	TOTAL
DIRECT MATERIAL	2100	3000	5100
DIRECT LABOR	360	1200	1560
MOH APPLIED	324	1080	1404
CLOSING	2784	5280	8064

COST SHEET

PARTICULARS		TOTAL COST
DIRECT MATERIAL	(1200 + 8000 +2100 + 3000)	14300
DIRECT LABOR	(1800 +4800 + 360 + 1200)	8160
PRIME COST		22460
MOH	(1620 + 4320 +324+ 1080 )	7344
ADD: OP. WORK IN PROCESS	(12000 + 8600)	20600
LESS: CL. WORK IN PROCESS	(2784 + 5280)	(8064)
WORKS COST / COST OF PRODUCTION / COST OF GOOD SOLD		42340
UNDER ABSORBED MOH		856
ADJUSTED COGS		43196
ADD: SELLING & ADMN. OH
SALES COMMISSION @ 2% OF SALES		1153
COST OF SALE		44349
PROFIT (30% OF COST)		13305
SALE		57654

LET SAY SALES = X

COMMISSION = 0.02X

COST OF SALE = 43196 + 0.02X

PROFIT = 30% OF COST

SALES = COST OF SALE + PROFIT

X = (43196 + .02X) +(43196+.02X) x 30%

X = 43196 +.02X +12958.80 + 0.006X

X - .02X - .006X = 43196 + 12958.80

0.974X = 56154.80

X = 56154.80 / .974

X = 57654

SALES = 57654

COMMISSION = 57654 x 2% = 1153

MAIN ANSWERS

A. THE AMOUNT OF MOH APPLIED TO ALL JOBS DURING THE AUGUST = $7344

B. THE ADJUSTED COGS REPORTED ON THE INCOME STATEMENT FOR AUGUST = $43196

C. THE GROSS PROFIT REPORTED ON THE INCOME STATEMENT FOR AUGUST

SALES	$57654
LESS: COGS	($43196)
GROSS PROFIT	$14458

D. THE ENDING WORK IN PROCESS BALANCE REPORTED ON THE BALANCE SHEET FOR AUGUST = $8064

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