NORTH DAKOTA CORPORATION (2-2)   NORTH DAKOTA CORPORATION does construction for residential customers and uses a job-order costing system to account for manufacturing operations

NORTH DAKOTA CORPORATION (2-2)

NORTH DAKOTA CORPORATION does construction for residential customers and uses a job-order costing system to account for manufacturing operations.  As of the beginning of February they had two jobs in process with the following work in process balances:

During February, two additional jobs were started:  A125 and A126.  Job A123 was completed during month and sold, with the client being billed at the company’s customary rate of cost plus 30%.   Job A124 was built on a speculative basis and, while finished, was not yet sold.  The remaining jobs were still in process at month’s end.

Construction costs for February are as follows:

The company uses a normal costing system and applies overhead at the rate of $9 per direct labor hour.  Direct labor rates average $15 per hour.

REQUIRED:

1. Determine the number of direct labor hours that were worked on each job for the month.
2. Compute the overhead applied to each job for the month

3. Prepare a simplified job-cost record for each job as of the end of February and post summary numbers to WIP, FG and CGS T-accounts (general ledger).

4. What were the work in process and finished goods inventory as of February 28?

5. What was the cost of goods manufactured for the month?
6. How much is the normal cost of goods sold?
7. Compute the sales and gross margin for February.

8. NOW what is the adjusted cost of goods sold and gross margin on the GAAP income statement for February?