Exercise 3-11 (Algo) Applying Overhead; Calculating Ending Inventories and Cost of Goods Sold [LO32, LO35]...
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Accounting
Exercise 3-11 (Algo) Applying Overhead; Calculating Ending Inventories and Cost of Goods Sold [LO32, LO35]
Heritage Company uses a job-order costing system to assign costs to jobs. It had no work in process or finished goods inventories on hand at the beginning of May. The table below provides data concerning the only three jobs worked on in May.
Job X
Job Y
Job Z
Direct labor hours
224
104
144
Direct materials
$ 5,880
$ 2,520
$ 3,840
Direct labor
$ 2,640
$ 1,600
$ 1,740
Jobs X and Y were completed in May; however, only 150 of the 200 units included in Job X were sold in May, whereas all 100 of Job Ys units were sold in May. Job Z was not completed by the end of the month.
Overhead costs are applied to jobs based on direct labor-hours and the predetermined overhead rate is $45 per direct labor-hour. The companys total applied overhead always equals its total actual overhead.
Required:
Compute the amount of overhead cost that would have been applied to each job during May.
Compute the work in process inventory that would be reported in the companys May 31 balance sheet.
Compute the finished goods inventory that would be reported in the companys May 31 balance sheet.
Compute the cost of goods sold that would be reported in the companys income statement for May.
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