Lambson Inc. uses a job-order costing system in which any underapplied or overap
ID: 2467313 • Letter: L
Question
Lambson Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at the end of the month. In January the company completed job Z65N that consisted of 31,000 units of one of the company's standard products. No other jobs were in process during the month. The total manufacturing cost on job Z65N's job cost sheet was $1,909,600. The manufacturing overhead for the month was underapplied by $15,300. During the month, 21,000 completed units from job Z65N were sold. No other products were sold during the month. The unit product cost for job Z65N is closest to:
Explanation / Answer
Answer :
Unit product cost = Total manufacturing cost / No. of units produced
= $1,909,600 / 31,000 = $61.6
Cost of goods sold = Unit product cost * No. of units sold = 61.6 * 21,000 = $1,293,600
Cost of goods sold at the end of month = $1,293,600 + $15,300 = $1,308,900.
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