Color, a company selling customized garments for niche customers
Use the following to answer questions 8, 9, 10 and 11:
The Disc Company uses a job order cost system. The following relate to the 4 jobs in the year
2017:
Job #1
Job #2
Job #3
Job #4
Direct materials issued to production
$7,000
$10,000
$10,200
$2,800
Direct labor costs
$4,500
$8,700
$6,600
$2,200
Additional information:
a. Manufacture overhead is applied to production costs on the basis of 150% of direct labor
costs.
b. Total manufacture overhead incurred was $30,000.
c. Jobs #1, #2, and #3 were completed during the year.
d. Jobs #1 and #2 were sold for $60,000 (selling price) and delivered to customers.
e. The company allocates any over- or underapplied overhead to work in process, finished
goods, and cost of goods sold based on their total overhead applied.
8. The cost of goods manufactured for the year 2017 is:
A) $76,700
B) $76,820
C) $77,500
D) $85,000
9. The amount of overapplied or underapplied overhead to be allocated to finished goods is
A) $300
B) $900
C) $2,700
D) $3,000
10. The ending balance of work-in-process inventory to be reported on Balance Sheet is:
A) $8,000
B) $8,300
C) $8,600
D) $0
11. The cost of goods sold to be reported on Income Statement is:
A) $48,200
B) $50,000
C) $51,800
D) $60,000
