Question 1

Applying Overhead to Jobs, Costing Jobs

Gorman Company builds internal conveyor equipment to client specifications. On October 1, Job 877 was in process with a cost of $18,660 to date.

During October, Jobs 878, 879, and 880 were started. Data on costs added during October for all jobs are as follows:

	Job 877	Job 878	Job 879	Job 880
Direct materials	$14,460	$6,020	$3,420	$1,720
Direct labor	15,000	8,700	1,600	1,800

Overhead is applied to production at the rate of 60% of direct labor cost. Job 877 was completed on October 28, and the client was billed at cost plus 50%. All other jobs remained in process.

Refer to the list below for the exact wording of text items within your job-order cost sheets.

Amount Descriptions

Beginning balance

Direct labor

Direct materials

2. Calculate the overhead applied to each job during October.

The overhead applied to Job 877 is .

The overhead applied to Job 878 is .

The overhead applied to Job 879 is .

The overhead applied to Job 880 is .

3. Calculate the balance in Work in Process on October 31.

The balance in Work in Process for Job 878 is .

The balance in Work in Process for Job 879 is .

The balance in Work in Process for Job 880 is .

The total balance in Work in Process is .

4. What is the price of Job 877?

The price of Job 877 is .

Question 2

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

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

	Job 106	Job 107	Job 108
Balance, July 1	$21,360	$6,170	$0
Direct materials	$10,420	$12,310	$16,120
Direct labor	$16,030	$12,280	$24,040
Machine hours	480	310	1,010

Overhead is applied to jobs at the rate of $15 per machine hour. By July 31, Jobs 106 and 108 were completed. Jobs 102 and 106 were sold. Job 107 remained in process. On July 1, the balance in Finished Goods was $49,000 (consisting of Job 102 for $25,600 and Job 104 for $23,400).

Golding prices its jobs at cost plus 30%. During July, variable marketing expenses were 5% of sales, and fixed marketing expenses were $2,010; administrative expenses were $4,780. (Round all amounts to the nearest dollar.)

Refer to the list below for the exact wording of text items within your job-order sheets.

Amount Descriptions

Applied overhead

Beginning balance

Direct labor

Direct materials

Total

Score: 80/84

Golding Company

Job-Order Cost Sheets

For the Month of July

1		Job 106	Job 107	Job 108
2	Beginning balance
3
4
5
6

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

The balance in Work in Process on July 31 is .

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

Finished Goods on July 31 is .

4. Calculate Cost of Goods Sold for July.

The cost of goods sold for July is .

5. Calculate operating income for Golding Company for the month of July.

The operating income for the month of July is .