Question

THE Company applies overhead to jobs using a pre-determined
overhead rate of 70% of direct labor cost. During 2021, THE
Company began work on three jobs. Information relating to
these three jobs appears below:

                         Job #1      Job #2      Job #3
direct materials ......  $39,000     $65,000     $41,000
direct labor cost .....  $54,000     $71,800     $37,300

By the end of 2021, job #1 and job #2 had been completed.
Job #3 was not completed by the end of 2021. Additionally,
by the end of 2021, one-half of job #2 had been sold and
one-third of Job #1 was sold. THE Company incurred total
actual overhead cost of $122,740 during 2021.

Calculate the cost of goods sold reported by THE Company
for 2021 after the overhead variance has been closed.

Answer 1

			Job 01	Job 02	Job 03	Total
Direct material		39000	65000	41000	145000
Direct Labour		54000	71800	37300	163100
Overheads applied @ 70% of DLC	37800	50260	26110	114170
Total cost			130800	187060	104410	422270
Status			Finished	Finished	In process
Under/Over-applied Overheads
Overheads incurred		122740
Overheads applied		114170
Under-applied overheads	8570
Amount of Cost of goods sold (Adjusted)
Cost of Job 01 sold (130800*1/3)	43600
Cost of Job 02 sold(187060*1/2)	93530
Unadjusted COGS		137130
Add: Under-applied Overheads	8570
Adjusted COGS		145700
Answer is $ 145700