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Data for the next 4 questions: The Donaldson Company uses a job-order cost system. The following data were recorded for June:
Question 12 (5 points) Companys selling price is based on manufacturing cost of each job and is equal to: Cost + 150% of Cos
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Answer #1

Solution:

June 1st

DM , DL and Overheads Added During June

Job Number

Work in Process Inventory (per Job Cost Sheets)

Direct Materials

Direct Labor

Overheads (60% of Direct Labor)

Total Manufacturing Costs

175

$1,800

$1,000

$400

$240

$3,440

176

$1,000

$1,500

$800

$480

$3,780

177

$600

$2,000

$1,200

$720

$4,520

178

$700

$1,500

$1,000

$600

$3,800

Jobs completed and transferred to finished goods during June = 175, 176, 177

Jobs delivered to the customer = 175

Jobs in FG inventory = 176, 177

FG Inventory as of June 30th = $3,780 + $ $4,520 = $8,300

Sales for the month of June = (Manufacturing Cost + 150% of Cost) of Job 175 = $3,440 + 150% of 3,440 = $8,600

Opening Work-in-Process = $1,800 + $1,000 + $600 + $700 = $4,100

Closing Work-in-Process (Job 178) = $3,800

Total Manufacturing Costs = $3,440 + $3,780 + $4,520 + $3,800 = $15,540

Closing Inventory = $8,300

Gross Profit = Sales + Closing Inventory + Closing Work-in-process – Manufacturing Costs – Opening Work-in-process = $8,600 + $8,300 + $3,800 - $15,540 - $4,100 = $1,060

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