Classic Boats Inc. produces custom wood boats. Each boat is built to customer specifications. During April, its first month of operations, Classic Boats began production of three customer orders—Jobs 1 through 3.

The following transactions occurred during April.

(1) Purchased production materials totaling \($225,000\).

(2) Processed material requisitions for the following items:

(3) Processed timesheets showing the following:

(4) Applied overhead using a predetermined rate of 160 percent of direct labor cost.

(5) Completed Job 1 and transferred it to finished goods.

(6) Delivered Job 1 to the customer and billed her \($70,000.\) Two entries are required one for the cost of the goods, and another for the revenue.

Required

a. Calculate the production costs incurred in April for each of the three jobs.

b. Make the appropriate journal entry for each of the six transactions described above. Assume all payments will be made next month

c. How much gross profit did Classic Boats earn from the sale of Job 1?

c. Job 1 gross profit: \($11,960\)

d. Assume selling costs totaled \($2,000\) and general and administrative costs totaled \($5,500.\) Prepare an income statement for Classic Boats for the month of April. Assume there is no adjustment to cost of goods sold for underapplied or overapplied overhead.

Transcribed Image Text:

Job 1, direct materials $ 38,800 Job 2, direct materials 19,300 Job 3, direct materials 22,500 Indirect materials 43,500 Total $124,100