The following selected data were taken from the books of the Owens O-Rings Compa
ID: 2600764 • Letter: T
Question
The following selected data were taken from the books of the Owens O-Rings Company. The company uses job costing to account for manufacturing costs. The data relate to April operations.
A) Materials and supplies were requisitioned from the stores clerk as follows:
Job 405, material X, $7,400.
Job 406, material X, $3,400; material Y, $6,400.
Job 407, material X, $7,400; material Y, $3,600.
For general factory use: materials A, B, and C, $2,700.
B) Time tickets for the month were chargeable as follows:
C) Other information:
Factory paychecks for $37,100 were issued during the month.
Various factory overhead charges of $19,800 were incurred on account.
Depreciation of factory equipment for the month was $5,800.
Factory overhead was applied to jobs at the rate of $3.60 per direct labor hour.
Job orders completed during the month: Job 405 and Job 406.
Selling and administrative costs were $2,500.
Factory overhead is closed out only at the end of the year.
If Job 406 was sold on account for $45,500, how much gross profit would be recognized for the job?
$5,100.
$6,900.
$20,900.
$38,600.
Job 405 $ 12,100 3,400 hours Job 406 $ 14,400 4,000 hours Job 407 $ 8,400 2,300 hours Indirect labor $ 4,100Explanation / Answer
Job 406 Amount Material X 3400 Material Y 6400 Labor 14400 Factory Overhead 14400 Total 38600 Sold for 45500 Gross profit 6900