Acc206 Principles of Accounting: Week 3 Chapter 4 Problem 2 General Corporation employs

Acc206 Principles of Accounting
Week 3
Chapter 4 Problem 2

2. Computations using a job order system
General Corporation employs a job order cost system. On May 1 the following balances were extracted from the general ledger;
Work in process 35,200
Finished goods 86,900
Cost of goods sold 128,700
Work in Process consisted of two jobs, no. 101 ($20,400) and no. 103 ($14,800). During May, direct materials requisitioned from the storeroom amounted to $96,500, and direct labor incurred totaled $114,500. These figures are subdivided as follows:
Document* Date Department Hours Amount
MR 1165 19-Mar Machining - 5,600
MR 1169 21-Mar Machining - 3,500
TT 1450-52 23-Mar Machining 45 400
MUR46 3-Mar Machining 105 -
MR 4330 27-Mar Finishing - 700
TT 1475-76 31-Mar Machining 30 300
MUR47 31-Mar Machining 50 -
TT 6608-13 31-Mar Finishing 200 2,000

Job no. 115 was the only job in process at the end of the month. Job no. 101 and three “other” jobs were sold during May at a profit of 20% of cost. The “other” jobs contained material and labor charges of $21,000 and $17,400, respectively.

General applies overhead daily at the rate of 150% of direct labor cost as labor summaries are posted to job orders. The firm’s fiscal year ends on May 31.

a. Compute the total overhead applied to production during May.
b. Compute the cost of the ending work in process inventory.
c. Compute the cost of jobs completed during May.
d. Compute the cost of goods sold for the year ended May 31.
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