Question

Angry Birds, Inc. designs and builds retaining walls for individual customers. On August 1, 2 jobs were in process: Level 1 with a beginning balance of $12,000 and Level 2 with a beginning balance of $8,600. During August, Level 3 and Level 4 were started. Levels 1 and 2 were sold at cost plus 30% during August. All other jobs remained in process at month end. The company applies manufacturing overhead at a rate of $9 per direct labor hour. Direct labor wages average $10 per hour. The following additional cost information is available for August: Direct Materials Level 1 $1,200 $1,800 Level 2 $8,000 $4,800 Level 3 $2,100 $360 Level 4 $3,000 $1,200 Direct Labor The sales staff is paid a 2% commission on all sales for the period. The company closes out the total over/underapplied manufacturing overhead to Cost of Goods Sold at the end of each month. Calculate the following given actual MOH of $8,200 incurred during August. The amount of MOH applied to all jobs in process during August equals $ The adjusted COGS reported on the Income Statement for August equals $ The gross profit reported on the Income Statement for August equals $ The ending work in process balance reported on the Balance Sheet for August equals $ Round final answers to the nearest dollar.

Answer 1

Answeyi Pageno The amount of Mon applied to all jobs in Pro all during August Particulars Levell Levela Level 3 Level 4 Total Direct labor 1800 4800 360 1200 Direct labor rate 10 4800 1800 10 = 180 360 10 E 35 | 1200110 =120 =W80 per how Direct dabor how Predetermined Overhead rate Moh applied 9 9 180 X 480 49 36x9 120x9 = 1620 =4320 =324 =1080 7344 The Adjuated COGę ore posted on the income agust cost of Goods sold a cost of Jobsold =colt of levellfa statement for ayudt Particulars Beg Bal Level 12000 1200 Level2 Total 8600 8000 1800 Direct Materiall Direct labou MOH applied Total =COGS 4800 1620 U320 16,620 25,726 42,340

Pagenad Total Hol applied to jobs = 7344 Actual HOH = $ 8200 Applied HOH <Actual HOH, Hence undeo- abdoiption unden absorbed Overhead - Actual HOH-Applied HOH = 8200 - 7344 = 856 Adjusted Cost of Goods sold :- cost of Goods sold $42340 Add:- undea absorbed Overhead =$856 Adjusted Cost of Goods sold = $ 43,196 The -googd profit ore poated on the income flaterad foor August t ㅏ Sales Revenue - Cost of Jobs Sold + 30% = 42340+30% =$55,042 tessi Adjusted COGS Goross porofit =($43,196) $ 11,846

The the balance sheet for Augelt: Pagena Ending book in porocell balance deported on Ending work in process balance - Cost of job! incomplete cost of leved 384 level 3 Level 4 Total 3 000 1200 Direct Materiall 2100 Direct labor 360 How applied 324 Total = Ending2784 wip 1080 5280 8064