Introduction

GoFood Custom Trailers, Inc. customizes trailers for food vendors. As of the beginning of January the company had three jobs already in progress (jobs A, B, and C). Below are the costs incurred to date on each of these jobs:

Jobs in Process	Costs incurred to date
Job A	$23,000
Job B	$12,000
Job C	$4,000
TOTAL Work in Process	$39,000

During the month of January the company started five more jobs (jobs D, E, F, G and H). Below is a summary of the direct materials used for all eight jobs and the direct labor hours incurred on each job during the month of January:

Jobs Worked in January	Direct Materials Used		Direct Labor hours incurred
Job A	$0		25
Job B	$4,500		80
Job C	$13,000		65
Job D	$8,500		110
Job E	$10,200		60
Job F	$18,000		35
Job G	$15,600		48
Job H	$11,700		55
TOTALS	$81,500		478

The company pays an average labor rate of $25.00 per hour. The company also applies manufacturing overhead to each job based on direct labor hours. The application rate is adjusted each month based on total expected overhead costs and total expected direct labor hours. The company estimates its total overhead costs in January to be $75,600 and expects to incur 500 total direct labor hours.

As of January 1 the company had a balance of in raw materials inventory of $10,000. During the month the company purchased $100,000 in raw materials. As stated above, the company started the month of January with a $39,000 balance in work-in-process inventory. The finished goods inventory as of January 1 was zero. During the month of January, the company incurred the following actual overhead costs:

Actual Overhead Costs
Office Supplies	$6,500
Indirect Materials	$9,300
Indirect Labor	$20,000
Factory Cleaning	$2,500
Depreciation	$16,000
Utilities	$5,700
Rent	$9,000
	$69,000

During January, the company completed jobs A, B, C, E, and G. Further, jobs A, C, and E were sold during the month.

REQUIRED:

Determine the cumulative total manufacturing costs incurred to date for each of the eight jobs.

What were the total current manufacturing costs incurred in January for the company?

For the month of January, what is the cost of goods manufactured?

For the month of January, what is the cost of goods sold?

As of January 31, determine the ending balance of the raw materials inventory.

As of January 31, determine the ending balance of the work-in-process inventory.

As of January 31, determine the ending balance of the finished goods inventory.

Determine how much, if any, the manufacturing overhead account is over/under applied as of January 31.

Work-in-Process Inventory Costs Incurred as of January 1 $23,000 $12,000 $4,000 $39,000 Jobs in Progress at January1 Job A Job B Job C TOTAL Work in Process Costs incurred in January Direct Labor hours Direct Jobs Worked in January Materials Usedincurred Job A Job B Job C Job D Job E Job F Job G Job H TOTALS $0 $4,500 $13,000 $8,500 $10,200 $18,000 $15,600 $11,700 S81,500 25 80 65 110 60 35 48 478