Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen

Exercise 33

PREDETERMINED OVERHEAD RATE, APPLICATION OF OVERHEAD TO JOBS, JOB COST
On April 1, Sukanya Company had the following balances in its inventory accounts:

Work-in-process inventory is made up of three jobs with the following costs:

During April, Sukanya experienced the transactions listed below.
a. Materials purchased on account, $26,000.
b. Materials requisitioned: Job 114, $16,500; Job 115, $12,200; and Job 116, $5,000.
c. Job tickets were collected and summarized: Job 114, 350 hours at $12 per hour; Job 115, 280 hours at $15 per hour; and Job 116, 150 hours at $20 per hour.
d. Overhead is applied on the basis of direct labor cost.
e. Actual overhead was $8,718.
f. Job 115 was completed and transferred to the finished goods warehouse.
g. Job 115 was shipped, and the customer was billed for 120 percent of the cost.
Required:
1. Calculate the predetermined overhead rate based on direct labor cost.
2. Calculate the ending balance for each job as of April 30.
3. Calculate the ending balance of Work in Process as of April 30.
4. Calculate the cost of goods sold for April.
5. Assuming that Sukanya prices its jobs at cost plus 20 percent, calculate the price of the one job that was sold during April. (Round to the nearest dollar.)