Question 2) Scooby D Company makes jobs to customer order. During the month of J

Question

Question 2) Scooby D Company makes jobs to customer order. During the month of July, the following occurred: a) On July 1, the balances in Materials Inventory, Work-in-Process Inventory, and Finished Goods Inventory were $1,800, $5,100, and $3,945, respectfully. b) Materials were purchased on account for $68.505. c) Materials totaling $61,485 were requisitioned for use in producing various jobs. d) Direct labor payroll for the month was $33,600 with an average wage of $12 per hour. e) Actual overhead of $13,530 was incurred and paid in cash. f) Manufacturing overhead is charged to production at a rate of $4.95 per direct labor hour. g) Completed jobs costing $87,000 were transferred to finished goods. h) Various jobs were sold for $110,625. i) Scooby D prices its jobs at cost plus 25%. Required: 1) What are the balances in Materials Inventory, Work-in-Process Inventory, and Finished Goods Inventory as of July 31? 2) What will be immaterial? the balance in Cost of Goods Sold if we assume that any over- or under-applied overhead is

Explanation / Answer

Calculation of balances as on 31st July 1 Material Inventory Balance on July 1, 1800 Add: Purchase on account 68505 Less: Material requisitioned 61485 Balance on July 31, 8820 2 Work in process Balance on July 1, 5100 Material requisitioned 61485 Direct labor 33600 Overhead applied 13860 (33600/12)*4.95 Balance on July 31, 114045 3 Finished Goods Balance on July 1, 3945 Add: Completed jobs 87000 Less: Cost of jobs sold 88500 (110625/125)*100 Balance on July 31, 2445 Balance in cost of goods sold 88170 88500-(13860-13530)

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