Pac Incuses a Job-Order Costing System in Which Any Underapplied or or Overapplied

question 56

Essay

Pac Inc.uses a job-order costing system in which any underapplied or overapplied overhead for the period is closed out to cost of goods sold.In May the company completed job I07W that consisted of 20, 000 units of one of the company's standard products.No other jobs were in process during the month.The job cost sheet for job I07W shows that the total cost for the job was $1, 054, 000.During the month, the actual manufacturing overhead cost incurred was $304, 600 and the manufacturing overhead cost applied to job I07W was $292, 000.And during the month, 7, 000 completed units from job I07W were sold.No other products were sold.
Required:
Determine the cost of goods sold that would appear on the income statement for May.Show your work!

---

Definitions:

Put Premium

The cost associated with acquiring a put option, allowing the holder to sell an asset at a stipulated price within a specific timeframe, offering protection against asset depreciation.

Put Options

Financial contracts granting the holder the right to sell an asset at a predetermined price before a specified date.

Call Options

Financial contracts giving the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Underlying Asset

The financial instrument upon which derivative contracts, like options and futures, are based.