P 8. Laurence Norton is the chief financial officer of Rotham Industries, a company that makes special-order sound systems for home theaters. His records for February revealed the following information:

Beginning inventory balances Materials Inventory $27,450 Work in Process Inventory 22,900 Finished Goods Inventory 19,200 Direct materials purchased and received February 6 $ 7,200 February 12 8,110 February 24 5,890 Direct labor costs February 14 $13,750 February 28 13,230 Direct materials requested for production February 4 $ 9,080 February 13 5,940 February 25 7,600 Job order cost cards for jobs in process on February 28 had the following totals:

Job No. Direct Materials Direct Labor Overhead AJ-10 $3,220 $1,810 $2,534 AJ-14 3,880 2,110 2,954 AJ-15 2,980 1,640 2,296 AJ-16 4,690 2,370 3,318 The predetermined overhead rate for the month was 140 percent of direct labor costs. Sales for February totaled $152,400, which represented a 70 percent markup over the cost of production.

Required 1. Using T accounts for Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Overhead, Accounts Receivable, Payroll Payable, Sales, and Cost of Goods Sold, reconstruct the transactions in February.

2. Compute the cost of units completed during the month.

3. What was the total cost of goods sold during February?

4. Determine the ending balances in the inventory accounts.

5. During the first week of March, Jobs AJ-10 and AJ-14 were completed.

No additional direct materials costs were incurred, but Job AJ-10 needed

$720 more of direct labor, and Job AJ-14 needed an additional $1,140 of direct labor. Job AJ-10 was 40 units; Job AJ-14, 55 units. Compute the product unit cost for each completed job (round to two decimal places).

Job Order Costing in a Service Organization