The following selected data were taken from the books of the Owens O-Rings Company. The company uses job costing to account for manufacturing costs. The data relate to April operations.(1) Materials and supplies were requisitioned from the stores clerk as follows: Job 405, material X, $7,500. Job 406, material X, $3,500; material Y, $6,500. Job 407, material X, $7,500; material Y, $3,700. For general factory use: materials A, B, and C, $2,800. (2) Time tickets for the month were chargeable as follows: Job 405 $ 12,200 3,500 hours Job 406 14,500 4,100 hours Job 407 8,500 2,400 hours Indirect labor 4,200 (3) Other information: Factory paychecks for $37,200 were issued during the month. Various factory overhead charges of $19,900 were incurred on account. Depreciation of factory equipment for the month was $5,900. Factory overhead was applied to jobs at the rate of $3.70 per direct labor hour. Job orders completed during the month: Job 405 and Job 406. Selling and administrative costs were $2,600. Factory overhead is closed out only at the end of the year. If Job 406 was sold on account for $46,500, how much gross profit would be recognized for the job? Multiple Choice $39,670. $6,830. $21,500. $5,600.
The following selected data were taken from the books of the Owens O-Rings Company. The company uses
(1) Materials and supplies were requisitioned from the stores clerk as follows:
Job 405, material X, $7,500.
Job 406, material X, $3,500; material Y, $6,500.
Job 407, material X, $7,500; material Y, $3,700.
For general factory use: materials A, B, and C, $2,800.
(2) Time tickets for the month were chargeable as follows:
| Job 405 | $ | 12,200 | 3,500 | hours |
| Job 406 | 14,500 | 4,100 | hours | |
| Job 407 | 8,500 | 2,400 | hours | |
| Indirect labor | 4,200 | |||
(3) Other information:
Factory paychecks for $37,200 were issued during the month.
Various factory
Depreciation of factory equipment for the month was $5,900.
Factory overhead was applied to jobs at the rate of $3.70 per direct labor hour.
Job orders completed during the month: Job 405 and Job 406.
Selling and administrative costs were $2,600.
Factory overhead is closed out only at the end of the year.
If Job 406 was sold on account for $46,500, how much gross profit would be recognized for the job?
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$39,670.
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$6,830.
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$21,500.
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$5,600.
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