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Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost, Unit Cost
On August 1, Cairle Companys work-in-process inventory consisted of three jobs with the following costs:
| | Job 70 | Job 71 | Job 72 |
| Direct materials | $1,700 | $2,000 | $850 |
| Direct labor | 1,900 | 1,200 | 900 |
| Applied overhead | 1,520 | 960 | 720 |
During August, four more jobs were started. Information on costs added to the seven jobs during the month is as follows:
| | Job 70 | Job 71 | Job 72 | Job 73 | Job 74 | Job 75 | Job 76 |
| Direct materials | $800 | $1,235 | $3,600 | $5,000 | $300 | $560 | $80 |
| Direct labor | 1,000 | 1,400 | 2,200 | 1,800 | 600 | 850 | 170 |
Before the end of August, Jobs 70, 72, 73, and 75 were completed. On August 31, Jobs 72 and 75 were sold.
Required:
1. Calculate the predetermined overhead rate based on direct labor cost. % of direct labor cost.
2. Calculate the ending balance for each job as of August 31.
| | Ending Balance |
| Job 70 | $ |
| Job 71 | $ |
| Job 72 | $ |
| Job 73 | $ |
| Job 74 | $ |
| Job 75 | $ |
| Job 76 | $ |
3. Calculate the ending balance of Work in Process as of August 31. $
4. Calculate the cost of goods sold for August. $
5. Assuming that Cairle prices its jobs at cost plus 25 percent, calculate Cairles sales revenue for August. $
Answer & Explanation
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