Question
The following selected data were taken from the books of the Owens O-Rings Company. The company uses job costing to account for manufacturing costs. The
The following selected data were taken from the books of the Owens O-Rings Company. The company uses job costing to account for manufacturing costs. The data relate to April operations. (1) Materials and supplies were requisitioned from the stores clerk as follows:
Job 405, material X, $7,000.
Job 406, material X, $3,000; material Y, $6,000.
Job 407, material X, $7,000; material Y, $3,200.
For general factory use: materials A, B, and C, $2,300.
(2) Time tickets for the month were chargeable as follows:
Job 405 | $ | 11,000 | 3,000 | hours |
Job 406 | 14,000 | 3,600 | hours | |
Job 407 | 8,000 | 1,900 | hours | |
Indirect labor | 3,700 | |||
(3) Other information:
Factory paychecks for $36,700 were issued during the month.
Various factory overhead charges of $19,400 were incurred on account.
Depreciation of factory equipment for the month was $5,400.
Factory overhead was applied to jobs at the rate of $3.50 per direct labor hour.
Job orders completed during the month: Job 405 and Job 406.
Selling and administrative costs were $2,100.
Factory overhead is closed out only at the end of the year.
If Job 406 was sold on account for $41,500, how much gross profit would be recognized for the job?
Multiple Choice
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$18,500.
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$5,900.
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$35,600.
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$3,800.
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