Question

Job-Order Cost Sheets, Balance in Work in Process and Finished Goods

Prull Company, a job-order costing firm, worked on three jobs in July. Data are as follows:

	Job 86	Job 87	Job 88
Balance, July 1	$15,310	$4,250	$0
Direct materials	$4,450	$10,300	$13,150
Direct labor	$16,000	$12,200	$24,000
Machine hours	500	300	1,000

Overhead is applied to jobs at the rate of $10 per machine hour. By July 31, Jobs 86 and 88 were completed. Jobs 82 and 86 were sold. Job 87 remained in process. On July 1, the balance in Finished Goods was $49,000 (consisting of Job 82 for $25,600 and Job 84 for $23,400).

Prull prices its jobs at cost plus 20%. During July, variable marketing expenses were 4% of sales, and fixed marketing expenses were $1,275; administrative expenses were $3,900. (Round all amounts to the nearest dollar.)

	Required:
1.	Prepare job-order cost sheets for all jobs in process during July, showing all costs through July 31.
2.	Calculate the balance in Work in Process on July 31.
3.	Calculate the balance in Finished Goods on July 31.
4.	Calculate Cost of Goods Sold for July.
5.	Calculate operating income for Prull Company for the month of July.

1. Prepare job-order cost sheets for all jobs in process during July, showing all costs through July 31. All amount cells must have an entry; enter zeros as needed.

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Score: 0/57

Prull Company

Job-Order Cost Sheets

For the Month of July

1		Job 86	Job 87	Job 88
2	Beginning balance
3	Direct materials
4	Direct labor
5	Applied overhead
6	Total

2. Calculate the balance in Work in Process on July 31.

The balance in Work in Process on July 31 is .

3. Calculate the balance in Finished Goods on July 31.

The balance in Finished Goods on July 31 is .

4. Calculate Cost of Goods Sold for July.

The cost of goods sold for July is .

5. Calculate operating income for Prull Company for the month of July.

The operating income for the month of July is .

Answer 1

1)

	Job 86	Job 87	Job 88
Balance, July 1	$ 15,310.00	$    4,250.00	$                 -
Direct materials	$    4,450.00	$ 10,300.00	$ 13,150.00
Direct labor	$ 16,000.00	$ 12,200.00	$ 24,000.00
Overhead	$    5,000.00	$    3,000.00	$ 10,000.00
Total	$ 40,760.00	$ 29,750.00	$ 47,150.00

2)

Work in Process = Job 87 = 29,750

3)

Beginning Finished Goods	$    49,000.00
Job 86	$    40,760.00
Job 88	$    47,150.00
	$ 136,910.00
Job 82	$ (25,600.00)
Job 86	$ (40,760.00)
Ending Finished Goods	$    70,550.00

4)

Cost of Goods Sold = Job 82 + Job 86

=25,600+40,760

=66,360

5)

Sales 66,360 + (20% x 66,360)	$ 79,632.00
Cost of goods sold	$ 66,360.00
Gross Margin	$ 13,272.00
Less Variable Marketing (4%* 79632)	$    3,185.28
Fixed Expenses	$    1,275.00
Administrative	$    3,900.00
Operating Income	$    4,911.72