Chapter 15, Problem 2Q

Net opreting income should increase? General accounting

On May 21, 2019, Christine worked 6.5 hours on Job A-1, and 3 hours on general "overhead activities." Christine is paid $13 per hour. Overhead is applied based on $23 per direct labor hour. Additionally, on May 21, Job A-1 requisitioned and entered into production $240 of direct material. On May 21, Christine, while working on Job A-1 used $27 of indirect material. Indirect material is included in the overhead application rate. Use this information to determine the total cost that should have been recorded in the Work in Process for Job A-1 on May 21. Round the answer to the closest whole dollar.

Suppose Austin Sound had sales of $300,000 and sales returns of $45,000. The cost of goods sold was $152,000. How much gross profit did Austin Sound report? a. $148,000 b. $103,000 c. $255,000 d. $88,000