Process the Income Statement for Pavlovich Prosthetics Company

Process the Income Statement for Pavlovich Prosthetics Company

Subject: Business    / Accounting
Question
Problem 5-48 Calculating Ending Work in Process, Income Statement Pavlovich Prosthetics Company… Description Problem 5-48 Calculating Ending Work in Process, Income Statement Pavlovich Prosthetics Company produces artificial limbs for individuals. Each prosthetic is unique. On January 1, three jobs, identified by the name of the person being fitted with the prosthetic, were in process with the following costs: Carter Pelham Tillson Direct materials $ 210 $ 615 $1,290 Direct labor 440 700 1,260 Applied overhead 374 595 1,071 Total $1,024 $1,910 $3,621 During the month of January, two more jobs were started, Jasper and Dashell. Materials and labor costs incurred by each job in January are as follows: Materials Direct Labor Carter $ 600 $ 300 Pelham 550 200 Tillson 770 240 Jasper 2,310 2,100 Dashell 190 240 Tillson and Jasper’s prosthetics were completed and sold by January 31. Required: 1. If overhead is applied on the basis of direct labor dollars, what is the overhead rate? (Note: Round your answer to four decimal places.) 2. Prepare simple job-order cost sheets for each of the five jobs in process during January. (Note: Round all amounts to the nearest dollar.) 3. What is the ending balance of Work in Process on January 31? What is the Cost of Goods Sold in January? 4. Suppose that Pavlovich Prosthetics Company prices its jobs at cost plus 30%. In addition, during January, marketing and administrative expenses of $2,635 were incurred. Prepare an income statement for the month of January.