Question

What is the total amount left in the Work in Process account at the end of May? (Hint: use the job cost sheet for open job(s)!) GEORGE DM DL FOH TOTAL Determine the amount of gross profit for each of the completed jobs, assuming they were sold for $12,000 each to the customer. Actual FOH costs are itemized below. Evaluate whether FOH is over or under- applied. Discuss the impact this would have on total Gross Profit (and Net Income) for Poldark Company for the month of May. Actual FOH IM 400 1,200 Other 1,650 Total: 3,250
Cost of a Manufactured Product - Job Costing System

1) During may, Poldark incurs the following costs below. Poldark begins on job during the month of may and completes the other three during the course of the month. Factory overhead is charged to the jobs on the basis of $.60 per dollar of direct labor hours.

2) Determine the total costs of each completed jobs in the space below.

3) What is the total amount left in the Work in progress amount at the end of May?

4) Determine the amount of gross profit for each of the completed jobs, assuming they were sold for $12,000 each to the customer.

5) Actual FOH costs are itemized below. Evaluate whether FOH is over or under-applied. Discuss the impact this would have on total Gross Profit ( and Net Income) for Poldark company for the month of May.

Answer 1

	ENYS	CARNE	TRURO	GEORGE
DM	500	600	2300	1900
DL	400	1000	1300	2300
FOH	240	600	780	1380
TOTAL	1140	2200	4380	5580

2)

	ENYS	CARNE	TRURO
DM	3000	2600	3200
DL	2400	2200	2100
FOH	1440	1320	1260
TOTAL	6840	6120	6560

3)

	GEORGE
DM	1900
DL	2300
FOH	1380
TOTAL	5580

4)

	ENYS	CARNE	TRURO
Sales revenue	12000	12000	12000
Cost of goods sold	6840	6120	6560
Gross profit $	5160	5880	5440

5)

Actual FOH	3250
FOH applied	3000
FOH under-applied	250

Gross profit and net income for May would be overstated.