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 35,000 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 $ 186,700 direct materials $ 590,500 direct labor cost $ 518,700 manufacturing overhead cost applied $ 629,100 during the month, 15,000 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 Toan Incorporated in September, calculated from the given costs of job S80M and the number of units sold, is approximately $825,000.

Step-by-step explanation:

Toan Incorporated uses a job-order costing system where the total manufacturing overhead applied equals total manufacturing overhead. To calculate the cost of goods sold (COGS) for September, we must ascertain the cost per unit and then multiply it by the number of units sold. With Job S80M, the job cost sheet provides a beginning balance and the costs of direct materials, direct labor, and manufacturing overhead.

The total costs for Job S80M are the sum of the beginning balance, direct materials, direct labor, and manufacturing overhead:

• Beginning Balance: $186,700
• Direct Materials: $590,500
• Direct Labor: $518,700
• Manufacturing Overhead: $629,100

Adding these together, the total cost is:

$186,700 + $590,500 + $518,700 + $629,100 = $1,925,000

The total cost of the job is then divided by the number of units produced to find the cost per unit:

$1,925,000 ÷ 35,000 units = $55 per unit

Finally, to find the COGS for the 15,000 units sold:

$55 per unit × 15,000 units = $825,000

Therefore, the cost of goods sold for September is closest to $825,000.