Question

Coronado Company begins operations on April 1. Information from job cost sheets shows the following. Manufacturing Costs Assigned Job Number April May June Month Completed 10 $6,200 $4,900 May 11 5,000 4,700 $3,100 June 12 1,500 April 13 5,600 4,600 June 14 7,000 4,100 Not complete Job 12 was completed in April. Job 10 was completed in May. Jobs 11 and 13 were completed in June. Each job was sold for 25% above its cost in the month following completion.
1. What is the balance in Work in Process Inventory at the end of each month?2. What is the balance in Finished Goods Inventory at the end of each month?3. What is the gross profit for May, June, and July?

Answer 1

Answer:1)  Balance in work in Process Inventory for   April, May, June

=   $11,200, $22,300,   $11,`100

2) Balance of finished goods for   April, May, June=  $1,500, $11,100, $23,000    

3)Gross profit for May , June, July     $375,$2,775  $5,750    

Explanation:

Given

Manufacturing Costs Assigned

Job Number April       May    June          Month Completed

10              $6,200   $4,900                         May

11                5,000       4,700     $3,100       June

12               1,500                                           April

13                                  5,600 4,600            June

14                                     7,000 4,100      Not complete

Solution

1) Balance in work in Process Inventory

Job      April                        May                                  June

10       $6,200

11          5,000        5,000+ 4700(9,700)

12          -                          -                                              -

13        --                           5,600                                   --

14            ---                     $7000                                   $7000 + 4,100 (11,100)

Total     $11,200             $22,300                                    $11,`100

2) Balance of finished goods

Job      April                        May                                  June

10      ---                       $6,200+ $4,900(11.100)  

11        ----                           ------                            5,000+4,700 + $3,100(12,800)      

12        $1,500                           -                                              -

13        --                           ----                                5,600+4,600 (10,200)  

14           Not complete                       Not complete

Total     $1,500                    $11,100                                $23,000

3) Gross profit for May , June, July.

May = Finished goods from previous month x mark up percent

$1,500 x 25%=$375

June  = Finished goods from previous month x mark up percent

$11,100 x 25%=$2,775

July= Finished goods from previous month x mark up percent

$23,000 x 25%=$5,750