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Accounting: How to find net income of month april

 
 
Reply Wed 18 May, 2016 08:57 am
Cleg Iron Works produces ornate iron grills to customer’s specifications. It uses a normal costing system and applies overhead based on direct labour hours. Any under-applied or over-applied overhead is adjusted to the cost of goods sold account.

 On 1 April, the Finished Goods and Work-in-Process inventory accounts consist of Job 200 and Job 201 respectively:

Job 200 Job 201
Direct materials $ 35,900 $ 20,000
Direct labour cost 27,000 12,000
Applied overhead 21,600 9,600
Total cost 84,500 41,600
Job Status Finished Goods Work-in-Process

 On 30 April, there was only one job remaining in the Finished Goods
Inventory account.

Job 201
Direct materials $29,700
Direct labour cost 22,000
Applied overhead 17,600
Total cost 69,300
Job Status Finished Goods

 Besides working on Job 201 in April, the company started work on Job 202 and Job 203 and incurred the following costs:

Job 202 Job 203
Direct materials $12,500 $5,550
Direct labour hours 1,000 750

 On 30 April, Job 202 and Job 203 were still in process.
 All factory workers are paid $20 per hour.
 All sales are billed at 150% of total cost.
 The costs incurred in the month of April comprised:
$
Depreciation:
Office Equipment 4,000
Plant & Machinery 7,000

Utilities:
Factory 3,500
General administration 800

Selling and administrative expenses 20,000
Factory rent 12,000
Indirect materials used 1,200
Indirect labour 15,000
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