The Compack Company assembles personal computers. Personal computers go through several departments where subassemblies are unpacked and checked, the circuit board is attached, the product is tested and repaired if defective, and the computers are packed carefully for shipping. Each order is treated as a job, and the entire job is shipped at once. The company keeps track of costs by job and calculates the equivalent stage of completion for each job based on machine-hours.

Although the company has grown rapidly, it has yet to show a profit. You have been called in as a consultant. Management believes some jobs are profitable and others are not, but its not clear which are profitable. The accounting system is almost nonexistent; however, you piece together the following information for April:

1. Production:

a. Completed Job No. 101.

b. Started and completed Job No. 102.

c. Started Job No. 103.

2. Inventory values:

a. Work in process inventory:

March 31: Job No. 101

Direct materials	$60,000
Direct labor	9,600
Overhead	14,400
April 30: Job No. 103
Direct materials	$45,000
Direct labor	10,400
Overhead	15,600

b. Job No. 101 was exactly one-half finished in direct labor-hours and machine-hours at the beginning of April, and Job No. 103 was exactly one-half complete in direct labor-hours and machine-hours at the end of April. However, all of the direct materials necessary to do the entire job were charged to each job as soon as the job was started.

c. There were no direct materials inventories or finished goods inventories at either March 31 or April 30.

3. Manufacturing overhead is applied at $30 per machine-hour. The company used 1,600 machine-hours during April, 480 machine-hours on Job 101 and 600 machine-hours on Job 102. The actual overhead for the month of April was $50,000.

4. Cost of goods sold (before adjustment for overapplied or underapplied overhead):

Job No. 101:

Materials	$60,000
Labor	?
Overhead	?
Total	?
Job No. 102:
Materials	?
Labor	?
Overhead	?
Total	?

5. Overhead was applied to jobs using the predetermined rate of $30 per machine-hour. The same rate had been used since the company began operations. Over- or underapplied overhead is debited or credited to Cost of Goods Sold.

6. All direct materials were purchased on account. Direct materials purchased in April amounted to $150,000.

7. Direct labor costs charged to jobs in April were $32,000. All labor costs were the same rate per hour for April for all laborers.

QUESTIONS

a. Compute the cost of each job, whether in inventory or sold.

b. Show the transactions in journal entry form. Use a separate Work in Process Inventory account for each job

c. Prepare an income statement for April assuming revenue was $250,000 and selling and administrative expenses were $60,000.