Question

1. Required:   Calculate the following amounts for May.

                        Work-in-Process: May 1

                        Work-in-Process: May 31

                        Finished Goods: May 31

                        Cost of Goods manufactured: May

                        Adjusted Cost of Goods Sold: May

Assume that the management of H. S. Job, Inc. calculated an estimated overhead application rate of $5 per direct labor hour.

At the beginning of the year one job was on hand. Job #678 had accumulated 200 kilogram of materials at $2 per kilograms and 100 hours of direct labor at $12 per hour.

During the year Job #678 was completed and Jobs #679, 680, and #681 were started. Job #678 and #679 were delivered to their respective customers, while Job #681 had not yet been completed.

Actual overhead for the period was $11,500. Any over or under applied overhead is charged to cost of goods sold for the period.

The following job cards were available at the end of the year.

	Job # 678 April                            Direct Material           200 kilograms at $2 per kilogram April                            Direct Labor                100 hours at $12 per hours April                            Machine Time             50 hours May                             Direct Material           200 kilograms at $2 per kilogram May                             Direct Labor                700 hours at $12 per hours May                             Machine Time             200 hours
	Job # 679 May                             Direct Material           225 kilograms at $2 per kilogram May                             Direct Labor                900 hours at $12 per hours May                             Machine Time             300 hours
	Job # 680 May                             Direct Material           150 kilograms at $2 per kilogram May                             Direct Labor                600 hours at $12 per hours May                             Machine Time             200 hours
	Job # 681 May                             Direct Material           50 kilograms at $2 per kilogram May                             Direct Labor                75 hours at $12 per hours May                             Machine Time             25 hours

Answer 1

Solution: Note 1 Work-in-Process: May 1 2100 (Job 678) 1375 Work-in-Process: May 31 Note 2 (Job 681) Finished Goods: May 31 (Job 680) Note 2 10500 Cost of Goods manufactured: May Note 2 ob 678 Job 679 Job 680 Total 14400 15750 10500 40650 Adjusted Cost of Goods Sold: May Note 2 & 3 ob 678 ob 679 Unadjusted cost of goods sold Underapplied overhead Adjusted cost of goods sold 14400 15750 30150 125 30275

Note 1: 678 units rate Direct material Direct Labor overhead Work-in-Process: May 1 200 100 100 2 400 12 1200 5 500 2100 Note 2: 678 679 680 681 Total 2100 Work-in-Process: May 1 (A) 2100 cost incurred during May Direct material Kg x rate Total Direct material (B) 20022515050 400450 300100 1250 Direct Labor Hours x rate Total Direct Labor (C) 700 900 600 75 12 12 12 12 8400 10800 7200900 27300 Overhead Hours x rate Total Overhead (D) 700 900 600 75 3500 4500 3000 375 11375 Total cost A+B+C+D 14400 15750 10500 1375 42025 Sold Sold FG WIP status Note 3: Actual ovehead Overhead applied Underapplied overhead 11500 11375 125