Question

Atlantic Manufacturing Corp operates a job-order costing system and applies overhead cost to jobs on the...

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:

Homework Answers

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
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