Question

For the year ended December 31, 2020, the job cost sheets of Cinta Company contained the following data. Job Number 7640 Explanation Balance 1/1 Current year's costs Balance 1/1 Current year's costs Current year's costs Direct Materials $27,500 33,000 12,100 47,300 63,800 Direct Labor $26,400 39,600 19,800 52,800 60,500 Manufacturing Total Overhead Costs $31,680 $85,580 47,520 120,120 23,760 55,660 63,360 163,460 72,600 196,900 7641 7642 Other data: 1. Raw materials inventory totaled $16.500 on January 1. During the year, $154,000 of raw materials were purchased on account. 2. Finished goods on January 1 consisted of Job No. 7638 for $95.700 and Job No.7639 for $101.200. 3. Job No. 7640 and Job No.7641 were completed during the year. 4. Job Nos. 7638,7639, and 7641 were sold on account for $583,000. 5. Manufacturing overhead incurred on account totaled $132,000. 6. Other manufacturing overhead consisted of indirect materials $15,400, indirect labor $19,800, and depreciation on factory machinery $8,800. - Your answer is partially correct. Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. Post each to the T-account in the following order: (1) beginning balance, (2) direct materials, (3) direct labor. (4) manufacturing overhead, and (5) completed jobs. Work in Process Inventory 141240 Completed Work 1/1 Balance 424820 Direct Materials 144100 Direct Labor 152900

Answer 1

Solution:

Sales = $583,000

Cost of Jobs sold 7638, 7639, 7641 = 95700 + 101200 + (55660+163460) = $416,020

Manufacturing Overhead overapplied = Applied overhead - Actual Overhead

= (47520+63360+72600) - (132000+15400+19800+8800) = $7,480

Gross Profit = Sales - Cost of Jobs sold + Manufacturing Overhead overapplied

= $583000- 416020+ 7480 = $174,460