The following selected data were taken from the books of the Bixby Box Company.

Question

The following selected data were taken from the books of the Bixby Box Company. The company uses job costing to account for manufacturing costs. The data relate to June operations.

  
A) Materials and supplies were requisitioned from the stores clerk as follows:

     Job 405, material X, $10,000.
     Job 406, material X, $4,200; material Y, $8,600.
     Job 407, material X, $10,000; material Y, $4,600.
     For general factory use: materials A, B, and C, $3,200.

B) Time tickets for the month were chargeable as follows:

C) Other information:

     Factory paychecks for $52,200 were issued during the month.
     Various factory overhead charges of $26,100 were incurred on account.
     Depreciation of factory equipment for the month was $6,000.
     Factory overhead was applied to jobs at the rate of $3.00 per direct labor hour.
     Job orders completed during the month: Job 405 and Job 406.
     Selling and administrative costs were $3,000.
     Factory overhead is closed out only at the end of the year.

If Job 406 was sold on account for $59,400, how much gross profit would be recognized for the job?

The following selected data were taken from the books of the Bixby Box Company. The company uses job costing to account for manufacturing costs. The data relate to June operations.

Explanation / Answer

Calculation of Gross Profit of Job 406 Particulars Amt Sale Price of Job 406 $59,400 Job 406 Direct Material Material X $4,200 Material Y $8,600 $12,800 Direct Labour $20,000 Maufacturing Overehead $12,600 (4200 Hrs X $3) Cost of Job 406 45400 Gross Profit $14,000

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