Question

The following information is available for completed Job No. 402: Direct materials, $120,000; direct labor, $180,000; manufacturing overhead applied, $90,000; units produced, 5,000 units; units sold, 4,000 units. The cost of the finished goods on hand from this job is?

Answer 1

Answer: The cost of the finished goods on hand from this job is $78000.

Explanation:

Given that,

Direct materials, = $120,000

Direct labor,  = $180,000

Manufacturing overhead applied, = $90,000

Units produced, = 5,000 units

Units sold, = 4,000 units

Therefore,

Cost of finished goods produced = Direct Material + Direct Labor + Manufacturing Overhead

= $120,000 + $180,000 + $90,000

= $390,000

Hence,

Per Unit of Cost of finished goods produced = $\frac{Cost\ of\ finished\ goods\ produced}{Units\ produced}$

=  $\frac{390000}{5000}$

= $ 78 per unit

Cost of finished goods on hand = Inventory × Per unit cost

= (Units produced - Units sold)  × Per unit cost

= 1000 × 78

=$78000

∴The cost of the finished goods on hand from this job is $78000.