Bandit Data Systems manufactures specialty transportation equipment. Since the equipment is unique, Bandit designs each piece...

Bandit Data Systems manufactures specialty transportation equipment. Since the equipment is unique, Bandit designs each piece to customer specifications. The company uses a job-order cost system and applies overhead on the basis of machine hours using a predetermined overhead rate. For the year, budgeted manufacturing overhead is $7,850,000 and the expected activity level is 125,000 machine hours. Data regarding jobs in September are presented below.

By the end of September 2019, all jobs but NM428 & TX528 were completed, and all completed jobs had been delivered to customers with the exception of OR568.

Bandit Data Systems
	Balance	Direct	Direct	Machine
Job.No	8/31/2019	Materials	Labor	Hours
CO698	$178,450	$65,870	$28,400	755
AR789	196,780	22,150	12,160	150
OR568	109,300	2,680	15,460	420
NM428	15,670	167,400	48,000	3,200
CA112	0	115,000	136,800	3,600
TX528	0	28,900	12,580	2,150

Find the September ending balances for the following accounts:
1. Work in Process
2. Finished Goods
What is the amount of Cost of Goods Manufactured?
What was the cost of the goods sold?

Expert Solution

predetermined overhead rate = budgeted overhead /machine hours
predetermined overhead rate = 7850000/125000 = 62.8

JOB COST SHEET
particulars	CO698	AR789	OR568	NM428	CA112	TX528	TOTAL
BEGINNING balance	178450	196780	109300	15670	0	0	500200
costs:
direct material	65870	22150	2680	167400	115000	28900	402000
direct labor	28400	12160	15460	48000	136800	12580	253400
applied overhead ***	47414	9420	26376	200960	226080	135020	645270
total cost added	141684	43730	44516	416360	477880	176500	1300670
total cost	320134	240510	153816	432030	477880	176500	1800870

WORK in process balance
cost of job NM428	432030
ADD: cost of job TX 528	176500
TOTAL	608530

Finished goods
cost of job AR789	240510
COST OF JOB OR568	153816
TOTAL	394326

goods manufactured
cost of job CO698	320134
cost of job AR789	240510
cost of job OR568	153816
cost of job CA112	477880
TOTAL	1192340

Cost of goods sold
cost of job CO698	320134
cost of job CA112	477880
TOTAL	798014

*** APPLIED OVERHEAD = PREDERMINED RATE*MACHINE HOURS

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