Job$-$Order Cost Sheets, Balance in Work in Process and Finished Goods

Prull Company, a job$-$order costing firm, worked on three jobs in July. Data are as follows:

Line Item Description Job $86$ Job $87$ Job $88$

Balance, July $1$ $$15,310$ $$4,250$ $$0$

Direct materials $$4,450$ $$10,300$ $$13,150$

Direct labor $$16,000$ $$12,200$ $$24,000$

Machine hours $5003001,000$

Overhead is applied to jobs at the rate of $$10$ per machine hour. By July $31,$ Jobs $86$ and $88$ were completed. Jobs $82$ and $86$ were sold. Job $87$ remained in process. On July $1,$ the balance in Finished Goods was $$49,000($consisting of Job $82$ for $$25,600$ and Job $84$ for $$23,400).$

Prull prices its jobs at cost plus $20\%.$ During July, variable marketing expenses were $4\%$ of sales, and fixed marketing expenses were $$1,275$; administrative expenses were $$3,900.($Round all amounts to the nearest dollar.$)$

Required:

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$1.$ Prepare job$-$order cost sheets for all jobs in process during July, showing all costs through July $31.$ All amount cells must have an entry; enter zeros as needed.

Prull Company

Job$-$Order Cost Sheets

For the Month of July

Line Item Description Job $86$ Job $87$ Job $88$

Beginning balance $Beginning balance $Beginning balance $Beginning balance

Direct materials Direct materials Direct materials Direct materials

Direct labor Direct labor Direct labor Direct labor

Applied overhead Applied overhead Applied overhead Applied overhead

Total $Total $Total $Total

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Use the information provided and the overhead rate to fill in the Job Order Cost Sheets.

Review the "How to Prepare Brief Job$-$Order Cost Sheets" example in the text.

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$2.$ Calculate the balance in Work in Process on July $31.$

The balance in Work in Process on July $31$ is fill in the blank $1$ of $8$$$.$

$3.$ Calculate the balance in Finished Goods on July $31.$

The balance in Finished Goods on July $31$ is fill in the blank $2$ of $8$$$.$

$4.$ Calculate Cost of Goods Sold for July.

The cost of goods sold for July is fill in the blank $3$ of $8$$$.$

$5.$ Calculate operating income for Prull Company for the month of July.

The operating income for the month of July is fill in the blank $4$ of $8$$$.$

$6.$ Assume that at the beginning of July, Prull increased the overhead rate to $$12$ per machine hour.

The increased overhead rate will increase Work in Process to fill in the blank $5$ of $8$$$,$ Finished Goods to fill in the blank $6$ of $8$$$,$ and Cost of Goods Sold to fill in the blank $7$ of $8$$$.$ The new operating income is fill in the blank $8$ of $8$$$.$