Problem
Treston Co. has its first month of operations and starts without any inventory. During the first month, the following transactions occurred:
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1. Purchased raw materials for $3500 on account.
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2. Used raw materials for various jobs:
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Job 1
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$700
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Job 2
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$ 800
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Job 3
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$ 900
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Job 4
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$ 700
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Factory Use
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$ 240
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3. Used direct labor for various jobs:
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Job 1
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$850
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Job 2
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$1,000
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Job 3
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$1,150
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Job 4
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$ 700
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Factory Use
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$ 600
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4. The predetermined overhead rate is 70% of DL costs.
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5. Jobs 1, 2, and 3 are completed.
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6. Jobs 2 and 3 are sold on account. The selling price of each is determined as a markup of 30% on manufacturing cost.
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Calculate the following:
Ending materials
Ending work in process
Ending finished goods
Cost of goods manufactured
Cost of goods sold
Gross profit.