Augusta Test Systems Manufactures Automated Test Systems That Perform Quality

question 59

Essay

Augusta Test Systems manufactures automated test systems that perform quality inspections during and at the completion of the manufacturing process. As most manufacturing processes are unique, Augusta's test equipment is designed to customer specifications, and each system has a selling price in excess of $300,000. The company uses a job costing system based on the full absorption of actual costs and applies overhead on the basis of machine hours using a predetermined overhead rate. For the fiscal year ended November 30, budgeted manufacturing overhead was $1,960,000, and the expected activity level was 98,000 machine hours. Data regarding several jobs at Augusta are presented below.
By the end of November, all jobs but RX-115 were completed, and all completed jobs had been delivered to customers with the exception of SL-205.
$$\begin{array} { l c c c r } &&&&\text { Machine }\\\text { Job No }& \text { Balance } 10 / 31 & \text { Direct Materials } & \text { Direct Labor } &\text { Hours }\\ \text { XI-107 } & \$ 118,600 & \$ 4,000 & \$ 8,400 & 150 \\\text { ST-211 } & 121,450 & 2,500 & 12,160 & 300 \\\text { XD-108 }& 21,800 & 8 6 , 4 0 0 & 36,650 & 3,100 \\\text { SL-205 } & 34,350 & 71,800 & 32,175 & 2,700 \\\text { RX-115} & & 18,990 & 21,845 & 1,400 \\\end{array}$$
Required:
(a) Determine the balance in the Finished Goods Inventory on November 30.
(b) Compute the cost of goods manufactured for November.
(c) Compute the Cost of Goods Sold for November.
(d) Determine the balance in Work-In-Process Inventory on November 30.

---

Definitions:

Strong Correlation

A statistical relationship between two variables where a change in one is closely related to a change in the other.

Timbits

A popular Canadian snack consisting of small, bite-sized doughnut balls sold by the Tim Hortons chain.

Stress Level

The degree or extent of stress experienced by an individual, typically influenced by various external or internal factors.

Confounding Variable

A factor other than the independent variable that might produce an effect in an experimental design, potentially misleading the results.