Exercise 3-11 (Algo) Applying Overhead; Calculating Ending Inventories and Cost of Goods Sold [LO32, LO35]...

50.1K

Verified Solution

Question

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.

Answer & Explanation Solved by verified expert

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member