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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

  • $18,500.

  • $5,900.

  • $35,600.

  • $3,800.

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