Huse Inc., uses a job order costing system in which any underapplied or overappl

ID: 2417544 • Letter: H

Question

Huse Inc., uses a job order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In June, the company completed job J38C that consisted of 21,000 units of one of the company's standard products. No other jobs were in process during the month. The Job cost sheet for job J38C shows the follosing costs:

Beginning balance $ 25,200

Direct materials 816,900

Direct labor cost 147,000

Manufacturing overhead cost applied 226,800

During the month, the actual manufacturing overhead cost incurred was $229,110 and 16,000 completed units from job J38C were sold. No other products were sold during the month.

REQUIREMENT: Determine the unadjusted cost of goods sold for June. Please Show your entire work.

Explanation / Answer

Determine the unadjusted cost of goods sold for June:

Details

Amount

Beginning balance

$ 25,200

direct material

$ 816,900

direct labor cost

$ 147,000

manufacturing overhead Note 1

$ 172,800

Cost of goods sold

$ 1,161,900

Note 1:

Predetermined overhead cost = Manufacturing overhead cost applied / Estimated number of units

= $226,800 / 21,000

= $10.80

Manufacturing overhead = $10.80 * 16,000

= $172,800.