Question
Nadia Company uses a job order cost system. During the month of September, the company worked on three jobs. The job order cost sheets for
Nadia Company uses a job order cost system. During the month of September, the company worked on three jobs. The job order cost sheets for the three jobs contained the following information at the end of September:
Beginning Balances- Job A: $2,000; Job B: $1,500; Job C: $3,000
Direct Material- Job A: $500; Job B: $800; Job C: $1,000
Direct Labor- Job A: $1,200; Job B: $2,300; Job C: $900
The company applies overhead at 120% of direct labor cost.
If Job B sold for $8,000, what was the amount of gross margin for this job? (Ignore any consideration of over/under applied overhead.) The answer to this question is $640. How do you get $640?
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