Angry? Birds, Inc. designs and builds retaining walls for individual customers.
ID: 2431216 • Letter: A
Question
Angry? Birds, Inc. designs and builds retaining walls for individual customers. On August? 1, 2 jobs were in?process: Level 1 with a beginning balance of? $12,000 and Level 2 with a beginning balance of? $8,600. During? August, Level 3 and Level 4 were started. Levels 1 and 2 were sold at cost plus
40?%
during August. All other jobs remained in process at month end.
The company applies manufacturing overhead at a rate of
?$99
per direct labor hour. Direct labor wages average
?$1212
per hour. The following additional cost information is available for? August:
Level 1
Level 2
Level 3
Level 4
Direct Materials
?$1,200
?$8,000
?$2,100
?$3,000
Direct Labor
?$1,800
?$4,800
?$360
?$1,200
The sales staff is paid a? 2% commission on all sales for the period. Calculate the following given actual MOH of? $8,200 incurred during August.
The gross profit reported on the Income Statement for August equals
?$________.
? (enter commas where appropriate and round to nearest dollar i.e.? 1,000 not? 1000.2)
The ending work in process balance reported on the Balance Sheet for August equals
?$________.
? (enter commas where appropriate and round to nearest dollar i.e.? 1,000 not? 1000.2)
Level 1
Level 2
Level 3
Level 4
Direct Materials
?$1,200
?$8,000
?$2,100
?$3,000
Direct Labor
?$1,800
?$4,800
?$360
?$1,200
Explanation / Answer
Gross profit for August: $14,460
Ending work in process balance: $7,830
Working:
Sales revenue ($22,890 + $35,000) 57,890 Cost of goods sold ($16,350 + $25,000) 41,350 Add: MOH underapplied 2,080 Adjusted cost of goods sold 43,430 Gross profit $ 14,460