Question
Angry Birds, Inc. designs and builds retaining walls for individual customers. On August 1, 2 jobs were in process: Level 1 with a beginning balance
Angry Birds, Inc. designs and builds retaining walls for individual customers. On August 1, 2 jobs were in process: Level 1 with a beginning balance of $12,000 and Level 2 with a beginning balance of $8,600. During August, Level 3 and Level 4 were started. Levels 1 and 2 were sold at cost plus 40% during August. All other jobs remained in process and month end. The company applies manufacturing overhead at a rate of $11 per direct labor hour. Direct labor wages average $12 per hour. The following additional cost information is available for August. Level 1 has direct materials of $1,200 and direct labor of $1,800. Level 2 has direct materials of $8,000 and direct labor of $,4800. Level 3 has direct materials of $2,100 and direct labor of $360. Level 4 has direct materials of $3,000 and direct labor of $1,200. The sales staff is paid a 2% commission on all sales for the period. The company doses our the total over/underapplied manufacturing overhead to Cost of Goods Sold at the end of each month. Calculate the following given actual MOH of $8,200 incurred during August. 1) What is the amount of MOH applied to all jobs in process during August? 2) What is the adjusted COGS reported on the income statement for August? 3) What is the gross profit reported on the income statement for August? 4) What is the ending work inprocess balance reported on the balance sheet for August?
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