6 1428 points 41 Compute gross profit for April 42 Show how

6, 14.28 points 4.1 Compute gross profit for April. 4.2 Show how to present the inventories on the April 30 balance sheet Raw materials Work in process Finished goods

Solution

1. Computation of total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31).

Calculation of under or over applied overhead

$21500

Gross Profit for April

Sales 650,000

Less: Cost of goods sold (351500)

Gross profit 298500

Cost of goods sold = 330,000 + Under applied overhead

= 330,000 + 21500 =351500

2) Presenting the inventories on April 30 Balance sheet

Raw materials 78000   

Work in process 263000

Finished goods 513000

Total inventories 854000

Raw Materials Inventory

	Job 306	Job 307	Job 308	April Total
From March
Direct Materilas	27000	40,000		67,000
Direct labour	22,000	19,000		41,000
Applied overhead	11,000	9,500		20,500
Beginning goods in process	60,000	68500		128500
For April
Direct Materilas	132,000	215000	110,000	457.000
Direct labour	92,000	153,000	102,000	347,000
Applied overhead(50% of Direct labour)	46000	76500	51000	173500
Total costs added in April	270,000	444,500	263000	977500
Total costs (April 30)	330,000	513000	263000	1106000
Status on April 30	Finished (sold)	Finished (unsold)	In process
April 30 cost included in	Cost of goods sold	Finished goods inventory	Work in process inventory