Sunlight, Inc.designs and builds basketball gymnasiums.Each gymnasium is custom-built to individual customers' specifications.Sunlight uses job-order costing to keep track of its costs.In March it worked on three jobs.Data for these jobs are as follows:

Overhead is applied to jobs at the rate of $20 per machine hour.By March 31, Job 178 is the only one unfinished.The balance of finished jobs on March 1 is $60,000 (consisting of Job 177).Jobs 177 and 179 are sold during March.Sunlight sells its product at cost plus 30%.
What is the cost of goods sold for the month of March?

Question

Sunlight, Inc.designs and builds basketball gymnasiums.Each gymnasium is custom-built to individual customers' specifications.Sunlight uses job-order costing to keep track of its costs.In March it worked on three jobs.Data for these jobs are as follows:

Overhead is applied to jobs at the rate of $20 per machine hour.By March 31, Job 178 is the only one unfinished.The balance of finished jobs on March 1 is $60,000 (consisting of Job 177).Jobs 177 and 179 are sold during March.Sunlight sells its product at cost plus 30%.
What is the cost of goods sold for the month of March?

Quizplus · Accepted Answer

Cost of Goods Sold (COGS) consists of Jobs 177 and 179.
Job 179 = Direct Materials + Direct labor cost + Machine cost (Machine hours × Overhead rate)
= $32,600 + $42,000 + $60,000 (3,000 × $20) = $134,600
  Job 179 = $60,000 (Balance of finished jobs on March 1 is $60,000 (consisting of Job 177))
Total cost of both jobs = $134,600 + $60,000 = $194,600