Figure 5-6.Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual customers' specifications. Stutz uses job-order costing to keep track of its costs. In February it worked on three jobs. Data for these jobs are as follows:
Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only one unfinished. The balance of Finished Goods on February 1 is $94,000 (consisting of Job 177). Jobs 177 and 179 are sold during February. Stutz sells its product at cost plus 40%.
-Refer to Figure 5-6. What is sales revenue for February?

Question

Figure 5-6.Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual customers' specifications. Stutz uses job-order costing to keep track of its costs. In February it worked on three jobs. Data for these jobs are as follows:
  Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only one unfinished. The balance of Finished Goods on February 1 is $94,000 (consisting of Job 177). Jobs 177 and 179 are sold during February. Stutz sells its product at cost plus 40%.
-Refer to Figure 5-6. What is sales revenue for February?

Quizplus · Accepted Answer

To calculate sales revenue, we need to find the total cost of goods sold (COGS) for the month of February.

COGS = Beginning Finished Goods + Cost of goods manufactured - Ending Finished Goods
COGS = $94,000 + $542,400 - ($170,000 + $77,800)
COGS = $388,600

Sales Revenue = COGS + 40% markup
Sales Revenue = $388,600 + (0.4 * $388,600)
Sales Revenue = $544,040

Therefore, the sales revenue for February is $307,300 (Option D).