Incomplete Data-Job Costing: The Quik Copy Publishing Company is a rapidly growing company that has not been profitable despite its increases in sales. You have been called in as a consultant to find ways of improving the situation. You believe the problem results from poor cost control and inaccurate cost estimation on jobs. To gather data for your investigation, you turn to the accounting system, and find it almost nonexistent. However, you piece together the following information for April:

I. Production:

2. Inventory values: 

3. Actual manufacturing overhead, $10,000.

4. Cost of goods sold (before adjustment for over- or underapplied overhead):

5. Overhead was applied to jobs using a predetermined rate per labor-dollar. The same rate had been used since the company began operations. Over- or underap- plied overhead is written off each month as a separate expense or contraexpense (not debited or credited to Cost of Goods Sold).

6. All direct materials were purchased for cash and charged directly to Work in Process Inventory when purchased. Direct materials purchased in April amounted to $2,300.

7. Direct labor costs charged to jobs in April were $16,000. All labor costs were the same per hour for April for all laborers.

Required: Trace the flow of costs through the system, highlighting the following figures:

a. The cost elements (that is, material, labor, and overhead) of cost of goods sold before adjustment for over- or underapplied overhead, for each job sold.

b. The value of each cost element (that is, material, labor, and overhead) for each job in Work in Process Inventory at April 30.

c. Over- or underapplied overhead for April.

Transcribed Image Text:

a. Completed Job No. 101. b. Started and completed Job No. 102. c. Started Job No. 103.