Question

ICP 2- Avengers United Avengers United assigns costs to its products using a job order costing system. The company assembles and packages 30 different products based on individual customer orders. Each order has a distinct job number On April 1, the company had the following amounts in inventory Direct materials Work-in-process Finished goods $ 11,700 S 68,589 $35,280 Included in the work-in-process account are the following jobs A1 B2 C3 Direct materials Direct labour Overhead applied Total $ 6,300 4,785 4,200 10,815 6.489 26,700 22,089 S 19,800 9,750 5850 12,750 650 Included in the finished goods account are the following costs D4 S 10,800 15,300 9180 S 35,280 Direct materials Direct labour Overhead applied Total The data for jobs started during the month of April are as follows F6 $ 6,270 S5,400 1,800 12,510 E5 G7 Direct materials Direct labour 4,365 13,800 The following were added to existing jobs during April A1 B2 C3 Direct materials Direct labour $ 1,425 S615 3,000 1,800 6,750 5,250 Actual overhead expenses for April were as follows Supervisory salaries Factory rent Machine depreciation Indirect labour S 6,000 3,000 4,500 7,500 1,650 12,750 3,840 Factory supplies Selling expenses Factory employee benefits Additional information: Overhead is applied based on direct labour cost. . Direct materials purchased during April totalled $12,750. Only Jobs F6 and G7 are in work-in-process at the end of April, and only Job C3 is in finished goods. Under- or over-applied overhead is written off to cost of goods sold at month end. Required a) What is the total cost of Job B2? b) What are the April 30 balances for direct materials, work-in-process and finished goods inventory? c) What is the cost of goods manufactured in April? d) What is the over- or under-applied overhead for April?

Answer 1

a) The total cost of Job B2:
	amount $
WIP costs:
DM	4785
DL	10815
OH	6489
addition during april
DM	615
DL	5250
OH	3150	finished goods OH/DL ratio = 9180/12750=60%
Total Cost	31104
b) Total Cost per order:
	A1	B2	C3	E5	F6	G7	Total
WIP costs:
DM	6300	4785	4200
DL	12750	10815	9750
OH	7650	6489	5850
addition during april
DM	1425	615	1800	6270	5400	1800	17310
DL	3000	5250	6750	13800	12510	4365	45675
OH (0.6 of DL)	1800	3150	4050	8280	7506	2619	27405
Total Cost	32925	31104	32400	28350	25416	8784	90390
Status	SOLD	SOLD	FG INV.	SOLD	WIP	WIP
Balances on April 30 :
Direct Material	OB 11700 + PUR 12750 - USED 17310 = $7140
WIP	F6 + G7 = 25416+8784 = $34200
FG	Job C3 = $32400
c) Cost of goods manufactured in april :
	Amount $
O wip	68589
add: Input used:
DM	17310
DL	45675
OH	27405
Total Manufacturing	158979
Less: C wip	34200
Cost of Goods Manufactured	124779
d) Over or Under applied Overhead for April :
Overhead incurred	39240
Overhead applied during April	27405
Under applied Overhead	11835