Question

Sunland Sports has determined the following unit costs for each of its products:

		Pants		Jerseys		Jackets
Direct materials		$7.00		$10.00		$58.00
Direct labor		4.00		3.60		22.00
Manufacturing overhead		5.00		4.00		34.00
Total unit cost		$16.00		$17.60		$114.00
Sales price per unit		$21.00		$22.40		$179.00

On May 31, Sunland Sports’ Work in Process Inventory consisted of the following items:

Job		Units		Accumulated Cost
PA-1247—Pants		100		$1,150
JE-1397—Jerseys		200		2,800
JA 426—Jackets		50		4,350
				$8,300

During June, a total of $267,900 in direct materials and $125,380 in direct labor costs were incurred. Units finished and sold during June were as follows:

Product		Units Finished		Units Sold
Pants		13,500		14,000
Jerseys		3,200		3,100
Jackets		2,500		2,500

Given that Sunland Sports uses direct labor dollars as its application base, what is the company’s predetermined overhead rate? (Round answer to 0 decimal places, e.g. 15%.)

???

%

  Calculate the total manufacturing cost for June. (Round answer to 0 decimal places, e.g. 5,275.)

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.Calculate the Cost of Goods Manufactured for June. (Round answer to 0 decimal places, e.g. 5,275.)

???

Calculate the Ending Work in Process Inventory balance on June 30. (Round answer to 0 decimal places, e.g. 5,275.)

???

Calculate Cost of Goods Sold for June. (Round answer to 0 decimal places, e.g. 5,275.)

???

Calculate Gross Profit for June.

???

For each of the three products, state whether there are more, fewer, or the same number of finished units in Finished Goods Inventory on June 30 than there were on June 1.

Pants		select an option                                                                      No changeMoreFewer
Jerseys		select an option                                                                      FewerNo changeMore
Jackets		select an option                                                                      FewerMoreNo change

Answer 1

Answer:

Particulars	Pants	Jersey's	Jackets	Totals
Overhead cost	5	4	34	43
Direct Labor Cost (DLC)	4	3.60	22	29.6
Predetermined Overhead rate	125%

Direct Material a)	267,900
Direct Labor b)	125,380
Overhead (125,380 * 125%) c)	156,725
Total Manufacturing Cost (a+b+c)	550,005

Total Cost of Goods Manufactured = 13,500 * 16 + 3,200 * 17.60 + 2,500 * 114

= 216,000 + 56,320 + 285,000

  = 557,320

Closing Work In Process = Opening WIP + Total Manufacturing Cost - Total Cost of Goods Manufactured

= 8,300 + 550,005 - 557,320

= 985

Cost Of Goods Sold (COGS) = 14,000 * 16 + 3,100 * 17.60 + 2,500 * 114

= 224,000 + 54,560 + 285,000

= 563,560

Gross Profit = Total Sales - COGS

  = 810,940 - 563,560

= 247,380

Workings:

Total Sales = 14,000 * 21 + 3,100 * 22.40 + 2,500 * 179

= 294,000 + 69,440 + 447,500

= 810,940