Arnold co. hues a job order cost accounting system. Four jobs were started during the current year. The following is a record of the costs incurred.
|
Job#
|
Material used
|
Direct labor used
|
Direct labor hours used
|
|
1010
|
$35000
|
$62000
|
$7000
|
|
1011
|
49000
|
67000
|
6000
|
|
1012
|
25000
|
20000
|
3000
|
|
1013
|
16000
|
30000
|
4000
|
Actual overhead costs were $60,800. The predetermined overhead allocation rate is $3.50 per direct labor hour. During the year, jobs 1010, 1012, and 1014 were completed. Also, jobs 1010 and 1013 were sold for $362000 assuming that this is Arnold's first year of operations.
A) Calculate the balance in the goods in process inventory, finished goods inventory, and cost of goods sold accounts. Show all calculations.
B) Does the factory overhead account balance indicate an over-or under-application of overhead? Prepare the entry to close this out assuming the amount is not material.