Taylor Corp. uses a job order costing system and worked only on Job 101 during the current period. Job 101 was sold for $460,000. The following information pertains to costs incurred for Job 101.Direct materials $90,000 Indirect materials$30,000 Direct labor$130,000 Indirect labor$75,000 Depreciation of machinery $10,000 Factory supplies$8,000 Overhead rate90% of direct laborAfter adjusting for the amount of over- or underapplied overhead, determine the amount of gross profit earned during the year.
What will be an ideal response?
Job Costs:
| Direct Materials | $ 90,000 |
| Direct Labor | 130,000 |
| Overhead ($130,000 * 90%) | 117,000 |
| Underapplied Overhead | 6,000 | * (closed to cost of goods sold) |
| Total Cost of Goods Sold | $343,000 |
| Sales Price | $460,000 |
| Less Cost of Goods Sold | 343,000 |
| Gross Profit | $117,000 |
| Indirect Materials | $ 30,000 |
| Indirect Labor | 75,000 |
| Depreciation of Machinery | 10,000 |
| Factory Supplies | 8,000 |
| Total Actual Overhead | $ 123,000 |
| Applied Overhead | 117,000 |
| Underapplied Overhead | $ 6,000 |
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