Question

Job Costs Using a Plantwide Overhead Rate Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $285,000, and budgeted direct labor hours were 19,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance $24,900 $35,800 $19,400 $1,000 Materials requisitioned 19,300 23,400 10,300 14,800 Direct labor cost 10,400 20,500 4,950 5,700 Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month. Required: 1. Calculate the balance in Work in Process as of June 30. $ 2. Calculate the balance in Finished Goods as of June 30. $ 3. Calculate the cost of goods sold for June. $ 4. Calculate the price charged for Job 39. Round your answer to the nearest cent. $ 5. What if the customer for Job 40 was able to pay for the job by June 30? What would happen to the balance in Finished Goods? What would happen to the balance of Cost of Goods Sold?

Answer 1

Givey - Budgeled oveheall Budgeled Labour for Hour the year 8 2850oo. 14000 hours. Average wage late – $301 hour. Cost sweet for Tune mouth Particulars Job 39 | Tobyo Job 41 Beginning balance 824900 875800 $19400 Jobur $ 1000 dd Material Requestioned $ 19300 & 23400 910300 Direct labour cost floyou $20500 $4950 Labour Hour (Labour cost) 346 hours 683 haris 165 hours 8 14800 $5700 190 hour Avilege * overleed cost $5200 8 10236 8 2475 $28501 Total cost of Job. 8 59800 889950 $37,195 I 824350 Lookiy Noter overheal Pake Total overheaed Totel Buolgoled Hours o $985600 sist hour $19000 It meas overhead cost is loy of Labour cost, Ansh 15 Balance in work in process us of June 30 Job 4 1 and Job 4d Remaining fu comeplete. Hence work in process balance Job 41+ Job 42 $371254 8 24 350 z 8 61475

Balance in finisheel Goods Job yo is finished and Remmin Hence Balance in finished Good Job yoz 889950 - unsold. Si Cost of Good Soldt Job 39 is completed and sold Heuce cost of Goods sold - a 3 Job 39 lost $59800. A Price Price a clearged for Job 39 e) Job 39 Cost t loy, margin c) 59800 +5980 8-65780 I IN Customer is able to fay the colonelt thane finished Goods NIC. Balance will be and, sold is lucreased Cost of Goods by $89950. and become a 59800+ 89950 a $149750