Madtack Company uses a job-order costing system and started the month of March w

Question

 Madtack Company uses a job-order costing system and started the month of March with only one job in process (Job #359). This job had $5,000 of total cost assigned to it at the beginning of March. Madtack applies overhead to jobs at a rate of 175% of direct labor cost. During March, Madtack assigned production costs as follows to the jobs worked on during the month:                               Job #359      Job #360      Job #361 direct materials ..........   $1,000         $5,000       $3,000 direct labor ..............    2,000          3,000        2,000  During March, Madtack completed and sold Job #360. Job #361 was also completed but was not sold by the end of March. Job #359 was not completed by the end of March. Madtack Company had total actual overhead cost of $10,700 for the month of March.   Calculate Madtack's cost of goods manufactured for March.

Explanation / Answer

Job Cost sheet Job 359 Job 360 Job 361 Total Beginning Inventoty of WIP 5000 5000 Add: Material 1000 5000 3000 9000 Add: Labour 2000 3000 2000 7000 Add: Overheads applied @175% of DLC 3500 5250 3500 12250 Total Cost 11500 13250 8500 33250 Status WIP Sold FG Schedule showing Cost of Goods manufactured Beginning Inventory of WIP 5000 Add: Current cost of Manufacture: Material added in Jobs 9000 Labour added in Jobs 7000 Overheads applied (175% of 7000) 12250 Total Current cost of manufacturing 28250 Cost of Goods manufacturing 33250 Less:Ending inventory of WIP 11500 Cost of Goods manufactured (Job No. 360/361) 21750

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