Question

Toan Incorporated uses a job-order costing system and its total manufacturing overhead applied always equals its total manufacturing overhead. In September the company completed job S80M that consisted of 40,000 units of one of the company's standard products. No other jobs were in process, completed, or sold during the month. The job cost sheet for Job S80M shows the following costs: Beginning balance $ 236,700 Direct materials $ 715,500 Direct labor cost $ 668,700 Manufacturing overhead cost applied $ 779,100 During the month, 20,000 completed units from job S80M were sold. The cost of goods sold for September is closest to?

Answer 1

The cost of goods sold for September is $1,081,600.

Step-by-step explanation:

The cost of goods sold for September can be calculated by subtracting the total manufacturing costs of the completed units from the total manufacturing costs of Job S80M. The total manufacturing costs can be obtained by summing up the direct materials, direct labor cost, and manufacturing overhead cost applied.

In this case, the total manufacturing costs of Job S80M are $715,500 + $668,700 + $779,100 = $2,163,300.

Since 40,000 units were completed and 20,000 units were sold, the cost per unit can be calculated by dividing the total manufacturing costs by the number of completed units: $2,163,300 / 40,000 = $54.08.

The cost of goods sold for September is simply the cost per unit multiplied by the number of units sold: $54.08 * 20,000 = $1,081,600.