Question

Atlantic Manufacturing Corp operates a job-order costing system and applies overhead cost to jobs on the basis of direct labor cost. The company has provided the following data:
(Amounts in dollars $)
Estimated direct labor cost	85,000
Actual direct labor cost	87,000
Estimated manufacturing overhead costs	148,750
Actual manufacturing overhead costs	147,300
Purchases of raw materials (all direct)	141,000
	Beginning	Ending
Raw materials	23,000	16,000
Work in Process	44,000	36,000
Finished Goods	90,000	63,000
Information about Job 137 (use to answer related question below):
Direct materials	3,200
Direct labor	4,200

E) Compute the amount of adjusted cost of goods sold for the period. Assume that all over/under-applied overhead is closed to COGS.

Do not include dollar signs, commas or decimals in your response.

Answer:

F) Refer to the schedule of beginning and ending balances. Assume direct labor makes up $9,000 of the ending Work in Process inventory balance. Compute the amount of direct materials included in ending Work in Process.

Do not include dollar signs, commas or decimals in your response.

Answer:

G) Job 137 was started and completed during the year (see above for data pertaining to this job). If the company's selling prices are based on a 40% markup over total job cost, what was the selling price for job 137?

Do not include dollar signs, commas or decimals in your response. Round to nearest whole dollar.

Answer:

Answer 1

	Schedule for manufacturing cost
	beginning raw material	23000
Add	Purchase of raw material	141000
	Total	164000
Less	Ending Raw material	16000
	Raw material used in production		148000
	Direct labor		87000
	manufacturing cost applied		152250	(87000*1.75)
	Total manufacturing cost		387250
Add	Beginning work in progress		44000
			431250
less	Ending work in progress		36000
	Cost of goods manufactured		395250
Add	Beginning finished goods inventory		90000
	Cost of goods available for sale		485250
Less	Ending finished goods inventory		63000
	unadjusted Cost of goods sold		422250
Less	Over applied overheads		4950	(152250-147300)
	Cost of goods sold		417300

F

	Ending work in progress	36000
Less	Direct labor	9000
	Manufacturing overheads 9000*1.75	15750
	Total	24750
	Direct material	11250

G.

Job 137
Direct material	3200
Direct labor	4200
Manufacturing overheads applied	7350	(4200*1.75)
Total cost	14750
Mark up	5900	(14750*.4)
Selling price	20650