2017) SSESSMENT NUM Osbourne Company utilizes a Job-Order Costing Systems. Data

Question

2017) SSESSMENT NUM Osbourne Company utilizes a Job-Order Costing Systems. Data for the three (3) jobs that were in process during the month of August of the current year are as follows 221 Job 222 Balance-August 1 Direct Materials Direct Labor $12,640 $16,920 8,000 $10,500 $24,320 $16,250 $18,600 $28,890 Direct Labor Hours 800 600 1,000 Manufacturing Overhead is applied to jobs in production at the rate of $12 per Direct Labor Hour. At the end of the month of August of the current year, Job 220 and Job 221 were completed and transferred out to Finished Goods Inventory. Job 218 (completed in the month of July of the current year) and Job 220 were sold during the month of August of the current year. Job 222 remained in process at the end of the month of August of the current year. On August 1 of the current year, the balance in Finished Goods Inventory was $56,570 (consisting of Job 218 for $31,760 and Job 219 for $24,810) Osbourne Company prices its jobs at the job's cost plus forty percent (40%) markup. During the month of August of the current year, Variable Marketing (Selling) Expenses were six percent (6%) of Sales and Fixed

Explanation / Answer

1 Job order cost sheet Job 220 Job 221 Job 222 Balance,August 1 12640 16920 0 Direct materials 8000 10500 24320 Direct labor 16250 18600 28890 Applied manufacturing overhead 9600 7200 12000 (Direct labor hour*$12) (800*12) (600*12) (1000*12) Total 46490 53220 65210 2 Job 222 remained in process at the end of month Work in process inventory-Aug 31=Cost of job 222=65210 3 Finished goods inventory Beginning balance 56570 Add:Completed goods (Transferred in) (Job 220 & 221) (46490+53220) 99710 Total goods available for sale 156280 Less: sold-transferred out (Job 220 & 218) (46490+31760) 78250 Ending balance-Aug 31 78030 4 Cost of goods sold: Job 218 31760 Job 2220 46490 Ending balance-Aug 31 78250 5 Computation of net income: Sales (Cost+40%) (78250*140%) 109550 Less:Cost of goods sold 78250 Gross margin 31300 Less: Variable marketing (selling) expenses (109550*6%) 6573 Fixed marketing (selling) expenses 6000 Administrative expenses 8200 20773 Net income 10527 Production report Unit information Physical flow: Unit to account for: Units accounted for: Units in the beginning WIP 30000 Units completed 60000 Units started (80000-30000) 50000 Units in ending WIP 20000 Total units to account for 80000 Total Units accounted for 80000 Equivalent units: Units completed (60000*100%) 60000 Units in ending WIP (20000*20%) 4000 Total equivalent units 64000 Cost information Costs to account for Cost in beginning WIP 92800 Costs added by department 377600 Total costs to account for 470400 Cost per equivalent unit=470400/64000 7.35 Transferred out Ending WIP Total Costs transferred out=60000*7.35 441000 - 441000 Cost in ending WIP=20000*7.35 - 147000 147000 Total costs accounted for: 441000 147000 588000

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