Dirt Bikes, Inc., produces custom motorized dirt bikes. Each dirt bike is built to customer specifications. During April, its first month of operations, Dirt Bikes 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 time-sheets 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. (Hint: 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 previously. Assume all payments will be made next month.

c. How much gross profit did Dirt Bikes earn from the sale of job 1?

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

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Job 1, direct materials 38,800 19,300 22,500 43,500 Job 2, direct materials Job 3, direct Indirect materials Total $124,100 Job 1, direct labor (350 hours) Job 2, direct labor (275 hours) Job 3, direct labor (150 hours) Indirect labor Total $ 7,400 5,900 3,250 4,850 $ 21,400