Question

Ensign Landscape Design designs landscape plans and plants the material for clients. On April 1, there were three jobs in process, Jobs 39, 40, and 41. During April, two more jobs were started, Jobs 42 and 43. By April 30, Jobs 40, 41, and 43 were completed and sold. The following data were gathered:

	Job 39	Job 40	Job 41	Job 42	Job 43
Balance, April 1	$540	$3,400	$2,990	—	—
Direct materials	700	560	375	$3,500	$6,900
Direct labor	500	600	490	2,500	3,000

Overhead is applied at the rate of 110% of direct labor cost. Jobs are sold at cost plus 30%. Selling and administrative expenses for April totaled $4,575. (Round all amounts to the nearest dollar.)

	Required:
1.	Prepare job-order cost sheets for each job as of April 30.
2.	Calculate the ending balance in Work in Process (as of April 30) and Cost of Goods Sold for April.
3.	Construct an income statement for Ensign Landscape Design for the month of April.

Answer 1

1. Job order cost sheet for each job as of April 30 (Amounts are in $)

Particulars	Job 39	Job 40	Job 41	Job 42	Job 43
Balance April 1	540	3400	2990
Direct material	700	560	375	3500	6900
Direct Labor	500	600	490	2500	3000
Overhead @ 110% of labor	550	660	539	2750	3300
Total Cost	2290	5220	4394	8750	13200

2. Ending balance in Work in Progress

Particulars	Job 39	Job 42
Balance April 1	540
Direct material	700	3500
Direct Labor	500	2500
Overhead @ 110% of labor	550	2750
Balance of WIP	2290	8750

3. Cost Of Good Sold for April

Particulars	Job 40	Job 41	Job 43
Balance April 1	3400	2990
Direct material	560	375	6900
Direct Labor	600	490	3000
Overhead @ 110% of labor	660	539	3300
Cost of Goods Sold	5220	4394	13200

4. Income Statement for the month of April.

Particulars	Job 39	Job 40	Job 41	Job 42	Job 43	Total
Balance April 1	540	3400	2990
Direct material	700	560	375	3500	6900
Direct Labor	500	600	490	2500	3000
Overhead @ 110% of labor	550	660	539	2750	3300
Total Cost	2290	5220	4394	8750	13200
Selling Price (i.e 30% above cost)	Not sold	6786	5712	Not Sold	17160	29658
Total Sales value for Job 40, 41, & 43						29658
less Total COGS for Job 40, 41 & 43						-22814
less selling expense						-4575
Net Income from Job 40, 41, 43						2269