Question

Instructions Job-Order Cost Sheets, Balance In Work in Process and Finished Goods Prull Company, a job-order costing firm, worked on three jobs in July. Data are as follows: Job 86 Job 87 Job 88 Balance, July 1 $21,330 $6,250 $0 Direct materials $10,470 $12,220 $16,070 Direct labor $16,030 $12,200 $23,910 Machine hours 520 280 1,010 Overhead is applied to jobs at the rate of $17 per machine hour. By July 31, Jobs 86 and 88 were completed. Jobs 82 and 86 were sold. Job 87 remained in process. On July 1, the balance in Finished Goods was $48,990 (consisting of Job 82 for $25,560 and Job 84 for $23.430). Prull prices its jobs at cost plus 30%. During July, variable marketing expenses were 5% of sales, and fixed marketing expenses were $1,960; administrative expenses were $4,800. (Round all amounts to the nearest dollar.) Required: 1. Prepare job-order cost sheets for all jobs in process during July, showing all costs through July 31. 2. Calculate the balance in Work in Process on July 31. 3. Calculate the balance in Finished Goods on July 31. 4. Calculate Cost of Goods Sold for July 5. Calculate operating income for Prull Company for the month of July.

Answer 1

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Prull
Workings for Answer 1	Job 86	Job 87	Job 88
Machine hours	520.00	280.00	1,010.00
Overhead absorption rate	17.00	17.00	17.00
Overhead applied	8,840.00	4,760.00	17,170.00
Answer 1	Job 86	Job 87	Job 88
Balance, July 1	21,330.00	6,250.00	-
Direct material	10,470.00	12,220.00	16,070.00
Direct labor	16,030.00	12,200.00	23,910.00
Overhead applied	8,840.00	4,760.00	17,170.00
Total	56,670.00	35,430.00	57,150.00
Answer 2	Amount $
Cost of Job 87	35,430.00
Work in process on July 31	35,430.00
Answer 3	Amount $
Cost of Job 84	23,430.00
Cost of Job 88	57,150.00
Finished goods on July 31	80,580.00
Answer 4	Amount $
Cost of Job 82	25,560.00
Cost of Job 86	56,670.00
Cost of goods sold in July	82,230.00
Answer 5	Job 82	Job 86	Total
Cost of Job	25,560.00	56,670.00	82,230.00
Markup at 30%	7,668.00	17,001.00	24,669.00
Sale value	33,228.00	73,671.00	106,899.00
Less: Cost of goods sold	25,560.00	56,670.00	82,230.00
Gross margin	7,668.00	17,001.00	24,669.00
Less: Expenses
Marketing expense at 5 %	1,661.00	3,684.00	5,345.00
Fixed Marketing expense			1,960.00
Admin expense			4,800.00
Total Expenses			12,105.00
Operating Income			12,564.00