Question

Montreal Ltd. is a manufacturer of custom equipment and applies overhead to jobs on the basis of direct Required: labour hours. Montreal Ltd. estimated $840,000 overhead costs and 10,000 direct labour hours for the year. c. Calculate the work in process inventory on January 31, 2015: Montreal Ltd. had 2 jobs in work in process inventory on January 1, 2015. The company started 2 more jobs during January. The following data was provided for January: d. Calculate the finished goods inventory on January 31, 2015. Job 102 Job 103 Job 104 Job 105 e. Calculate the cost of goods sold for January. Balance Jan. 1, 2015 $36,480 $19,020 $0 $0 Direct Materials $34,420 $45,800 $30,480 $16,420 f. Assume Montreal Ltd. applies 40% markup on cost. What is the selling price of Job 103? Direct Labour Cost $23,000 $32,500 $19,500 $9,720 Direct Labour Hours 4,600 6,500 3,900 1,944 By January 31, 2015, Job 102 and Job 103 were completed and Job 103 was sold. The rest of the jobs remained in process. Required: a. Calculate the plantwide overhead rate per direct labour hour. Overhead Direct Labor Hour b. Complete the job order cost sheets for all four jobs in January. Job 102 Job 103 Job 104 Job 105 Beginning Balance Direct Materials Direct Labour Overhead Applied Total Cost 2.5

Answer 1

Required:
a) plantwide overhead rate = $840,000/10,000 direct labour	$             84.00	per  Direct Labor Hour
b)
Complete the job order cost sheets for all four jobs in January.
	Job 102	Job 103	Job 104	Job 105
Beginning Balance	$      36,480.00	$   19,020.00	$                -	$                -
Direct Materials	$      34,420.00	$   45,800.00	$   30,480.00	$   16,420.00
Direct Labour	$      23,000.00	$   32,500.00	$   19,500.00	$     9,720.00
Overhead Applied (Direct labour hours x $84)	$    386,400.00	$ 546,000.00	$ 327,600.00	$ 163,296.00
Total Cost	$    480,300.00	$ 643,320.00	$ 377,580.00	$ 189,436.00
c)
Work in process inventory on January 31, 2015: Total cost of j Job 104 + job 105	$    567,016.00
d)  finished goods inventory on January 31, 2015 = Job 102 + Job 103	$ 1,123,620.00
e ) cost of goods sold for January. = job 103	$    643,320.00
f. Assume Montreal Ltd. applies 40% markup on cost. What is the selling price of Job 103?
selling price of Job 103 = $643,320 x (1 + 40%)	$    900,648.00