Job Order Costing Problem

Drop Anchor takes special orders to manufacture sail boats for high end customers. The company had the following transactions for the month of May:

1. Purchased raw materials on credit, $125,000.

2. Materials requisitions: Job 240, $48,000; Job 241, $36,000; Job 242, $42,000; indirect materials were $12,000.

3. Time tickets used to charge labor to jobs: Job 240, $40,000; Job 241, $30,000; Job 242, $35,000, indirect labor is $25,000.

4. The company incurred the following additional overhead costs: depreciation of factory building, $70,000; depreciation of factory equipment, $60,000; expired factory insurance, $10,000; utilities and maintenance cost of $20,000 were paid in cash.

5. Applied overhead to all three jobs. The predetermined overhead rate is 190% of direct labor cost.

6. Transferred Job 240 with a total cost of $164,000 and Job 242 with a total cost of $143,500 to Finished Goods Inventory.

7. Sold job 240 for $300,000 for cash.