The Lee Company uses a job-order costing system. The following data were recorde

Question

The Lee Company uses a job-order costing system. The following data were recorded for June:

Added During June----

Job
Number

Overhead is charged to production at 80% of direct materials cost. Jobs 235, 237, and 238 were completed during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers.

The Lee Company uses a job-order costing system. The following data were recorded for June:

Added During June----

Job
Number

June 1
Work in Process
Inventory Direct
Materials Direct
Labor 235 $2,500 $600 $400 236 $1,500 $800 $1,000 237 $1,000 $1,200 $1,750 238 $800 $1,500 $2,250

Overhead is charged to production at 80% of direct materials cost. Jobs 235, 237, and 238 were completed during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers.

4. Lee Company's cost of goods sold for June was      A. $15,520. B. $10,170. C. $14,640. D. $9,730.

Explanation / Answer

Cost of goods sold would be the cost of the two jobs that were sold, 235 and 238: Job # WIP DM DL OH Total 235 2500 600 400 480 3980 238 800 1500 2250 1200 5750 Total 3300 2100 2650 1680 9730 Answer: D, $9730

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