Question

Calculate Betty's:

At January 1, 2020, Betty DeRose, Inc. reported work in process totaling $18,670. This balance was made up of three jobs having the following costs: Job #171 $4,390 Job #236 $6,370 Job #412 $7,910 total cost at Jan. 1, 2020 ..... During 2020, Betty DeRose reported the following transactions: a. Direct materials used were: Job #171, $6,700; Job #236, $4,100; and Job #412, $3,900. b. Direct labor incurred was: Job #171, $5,000; Job #236, $2,800; and Job #412, $3,000. c. Overhead was applied to jobs at a rate of 85% of direct materials used. d. Job #171, which consisted of 100 units, was completed and transferred to the finished goods warehouse. e. Job #412, which consisted of 250 units, was completed and transferred to the finished goods warehouse. f. 40 units from Job #171 were sold and shipped to the customer; the 40 units were sold at a total selling price of $12,000. g. The actual overhead cost incurred during 2020 amounted to $10,000.

A) Work In Process Inventory Balance at December 31, 2020

B) Finished goods inventory balance at December 31, 2020.

C) gross profit reported in Betty DeRose's income statement for 2020.

Answer 1

Job Cost Sheet

	Job 171	Job 236	Job 412
Beginning balance	4390	6370	7910
Direct material	6700	4100	3900
Direct labor	5000	2800	3000
Overhead	5695	3485	3315
Total	21785	16755	18125
Unit	100
Unit price	217.85

Applied overhead = 5695+3485+3315 = 12495

Actual overhead = 10000

Over applied overhead = 2495

Adjusted cost of goods sold = (40*217.85)-2495 = 6219

Gross profit = Sales-Cost of goods sold = 12000-6219 = 5781

a) Work in process inventory balance at December 31,2020 = 16755

b) Finished goods inventory = 60*217.85+18125 = 31196

c) Gross profit = 12000-6219 = 5781