Problem 3-37A Red Fire Inc. produces fire trucks. The company uses a normal job-order costing system to calculate its cost of goods manufactured. The companys policy is to price its job at cost plus 30% markup. On January 1, 2016, there was only one job in process, with the following costs:

Job 200
Direct materials	$14,400
Direct labour	18,000
Applied overhead	27,000
Total	$59,400

The following balances were taken from the general ledger of the company as of January 1, 2016:

Direct materials inventory	$45,100
Finished goods inventory (for Job 100)	$85,300

During the year 2016, the following events occurred: Direct materials were purchased on account for $376,000 Two more jobs were started: Job 300 and Job 400. Direct materials and direct labour costs incurred by each job in process during the year 2016 are as follows:

Job 200	Job 300	Job 400
Direct materials	$150,800	$45,100	$35,100
Direct labour	$133,000	$45,100	$25,400

The company incurred the following actual factory overhead during the year:

Factory rent	$134,500
Factory supplies	$55,500
Indirect labour	$84,830

Jobs 200 and 300 were completed. Jobs 100 and 200 were sold. Warning

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Calculate the total applied overhead for the year 2016. The factory overhead costs are applied to each job on the basis of direct labour dollars. (Round answer to the nearest whole dollar, e.g. 5,275.)

Total overheads applied

$

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Prepare simple job-order cost sheets for jobs 200, 300 and 400 for the year ended December 31, 2016. (Round answers to the nearest whole dollar, e.g. 5,275.)

Job No. 200
Total RevenueDirect materialsManufacturing overheadCost of completed workDirect labourTotal cost
Direct materialsDirect labourCost of completed workManufacturing overheadTotal costTotal Revenue	$
Total RevenueCost of completed workManufacturing overheadDirect labourDirect materialsTotal cost
Total RevenueCost of completed workDirect materialsDirect labourManufacturing overheadTotal cost
Manufacturing overheadDirect labourTotal costTotal RevenueCost of completed workDirect materials	$

Job No. 300
Cost of completed workDirect materialsManufacturing overheadTotal costTotal RevenueDirect labour
Cost of completed workDirect labourDirect materialsManufacturing overheadTotal costTotal Revenue	$
Direct materialsCost of completed workDirect labourManufacturing overheadTotal costTotal Revenue
Total RevenueCost of completed workManufacturing overheadDirect materialsTotal costDirect labour
Manufacturing overheadTotal RevenueTotal costCost of completed workDirect materialsDirect labour	$

Job No. 400
Direct materialsDirect labourManufacturing overheadTotal costTotal RevenueCost of completed work
Manufacturing overheadTotal RevenueDirect labourCost of completed workDirect materialsTotal cost	$
Total RevenueManufacturing overheadCost of completed workDirect materialsDirect labourTotal cost
Total RevenueManufacturing overheadCost of completed workTotal costDirect materialsDirect labour
Manufacturing overheadTotal RevenueTotal costDirect labourCost of completed workDirect materials	$

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Determine whether the overhead is over-applied or under-applied. By how much?

Manufacturing overhead applied:
Overhead incurred during the month	$
Manufacturing overhead applied
Under-appliedOver-appliedoverhead	$

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Prepare a schedule of Cost of Goods Sold, identifying both normal and adjusted cost of goods sold, for the year ended December 31, 2016.

RED FIRE INC. Statement of Cost of Goods Sold For the Year Ended December 31, 2016
Unadjusted Cost of goods soldAdjusted cost of goods soldOperating expensesOver-applied overheadUnder-applied overheadFinished goods inventory, January 1Cost of goods manufacturedCost of goods available for saleFinished goods, December 31	$
Under-applied overheadUnadjusted Cost of goods soldOperating expensesFinished goods inventory, January 1Adjusted cost of goods soldOver-applied overheadCost of goods manufacturedCost of goods available for saleFinished goods, December 31
Adjusted cost of goods soldOver-applied overheadOperating expensesFinished goods inventory, January 1Under-applied overheadCost of goods manufacturedCost of goods available for saleFinished goods, December 31Unadjusted Cost of goods sold
AddLess: Over-applied overheadFinished goods inventory, January 1Cost of goods available for saleFinished goods, December 31Under-applied overheadAdjusted cost of goods soldUnadjusted Cost of goods soldOperating expensesCost of goods manufactured
Finished goods inventory, January 1Cost of goods available for saleOver-applied overheadUnadjusted Cost of goods soldAdjusted cost of goods soldCost of goods manufacturedOperating expensesUnder-applied overheadFinished goods, December 31
AddLess: Operating expensesUnder-applied overheadUnadjusted Cost of goods soldFinished goods, December 31Finished goods inventory, January 1Over-applied overheadCost of goods manufacturedCost of goods available for saleAdjusted cost of goods sold
Cost of goods available for saleOperating expensesFinished goods, December 31Finished goods inventory, January 1Cost of goods manufacturedUnder-applied overheadAdjusted cost of goods soldOver-applied overheadUnadjusted Cost of goods sold	$

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Calculate the selling price of Job 200. (Round answer to the nearest whole dollar, e.g. 5,275.)

Selling price of Job 200

$

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Calculate the ending balances as of December 31, 2016, for the following accounts: Direct Materials and Work in Process.

Direct materials	$
Work-in-process	$