Madtack Company uses a job-order costing system and started the month of March w

Question

Madtack Company uses a job-order costing system and started the month of March with three jobs in process. The cost of beginning work in process plus the costs added during March are shown below: Job #360 $6,300 Job #361 $4,800 Job #359 beginning work in process ...3,500 COSTS ADDED DURING MAROH direct Labor $3,300 4,000 $4,900 5,000 3,000 Madtack applies overhead to jobs at a rate of 125% of direct labor cost. During March, Madtack completed and sold Job #360, Job #361 was also completed but was not sold by the end of March. Job #359 was not completed by the end of March. Madtack's actual overhead cost for the month of March totaled $18,000 Calculate the cost of goods sold reported by Madtack Company for March after the overhead variance has been closed. Do not use decimals in your answer.

Explanation / Answer

Job No. 359 Job no. 360 Job no. 361 Beginning WIP 3500 6300 4800 Add: Current period cost Material 4600 3300 4900 labour 3000 4000 5000 Overhead applied(125% of labour cost) 3750 5000 6250 Cost of WIP 14850 Cost of Finished Inventory 18600 20950 Now Job no. 360 has bene sold, therefore, finidhed inventory transferred to Cost of goods sold Is $ 18600 Moreover, Overhead incurred 18000 Less: Overheads applied (3750+5000+6250) 15000 Overhead underapplied charged to COGS 3000 Therefore, Total cost of goods sold is : Cost transferred from Finished inventory 18600 Add: Overhead underapplied 3000 Total Cost of goods sold 21600

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