Question :

Computations using a job order system

Spencer Corporation employs a job order cost system. On May 1 the subsequent balances were extracted from the general ledger;

Work in process $ 36,200

Finished goods 86,900

Cost of goods sold 130,700

Work in Process consisted of two jobs, no. 101 ($22,400) and no. 103 ($13,800). In May, direct materials requisitioned from the storeroom amounted to $96,500, and direct labor incurred totaled $116,500. These figures are subdivided as given:

Direct Materials                Direct Labor

Job No. Amount              Job No.                Amount

101         $6,000 101          $7,800

117         18,500  103        20,800

116         34,200  117        44,000

Other    36,800  116        18,000

$95,500 Other 25,900

$116,500

Job no. 117 was the only job in process at the end of the month. Job no. 101 and three "other" jobs were sold in May at a profit of 20% of cost. The "other" jobs contained material and labor charges of $23,000 and $17,400, correspondingly.

General applies overhead daily at the rate of 150 percent of direct labor cost as labor summaries are posted to job orders. The firm's fiscal year ends on May 31.

Instructions:

a. Evaluate the total overhead applied to production during May.

b. Determine the cost of the ending work in process inventory.

c. Evaluate the cost of jobs completed during May.

d. Calculate the cost of goods sold for the year ended May 31.