Job Costs Using a Plantwide Overhead Rate

Naranjo Company designs industrial prototypes for outsidecompanies. Budgeted overhead for the year was $270,000, andbudgeted direct labor hours were 27,000. The average wage rate fordirect labor is expected to be $20 per hour. During June, NaranjoCompany worked on four jobs. Data relating to these four jobsfollow:

	Job 39	Job 40	Job 41	Job 42
Beginning balance	$22,700	$32,200	$19,600	$200
Materials requisitioned	18,500	20,800	9,500	12,100
Direct labor cost	9,600	17,900	4,150	3,000

Overhead is assigned as a percentage of direct labor cost.During June, Jobs 39 and 40 were completed; Job 39 was sold at 115percent of cost. (Naranjo had originally developed Job 40 to orderfor a customer; however, that customer was near bankruptcy and thechance of Naranjo being paid was growing dimmer. Naranjo decided tohold Job 40 in inventory while the customer worked out itsfinancial difficulties. Job 40 is the only job in Finished GoodsInventory.) Jobs 41 and 42 remain unfinished at the end of themonth.

Required:

1. Calculate the balance in Work in Process asof June 30.

$

2. Calculate the balance in Finished Goods asof June 30.

$

3. Calculate the cost of goods sold forJune.

$

4. Calculate the price charged for Job 39.Round your answer to the nearest cent.

$

5. What if thecustomer for Job 40 was able to pay for the job by June 30? Whatwould happen to the balance in Finished Goods?

What would happen to the balance of Cost of Goods Sold?