Question

The job order cost sheets used by Greene Company revealed the following: Job. No. Bal., May 1 May Production Costs 134 $ 1,700 $ 0 135 1,200 300 136 0 900 Job No. 135 was completed during May and Jobs No. 134 and 135 were shipped to customers in May. What was the company's cost of goods sold for May and the balance of Work in Process inventory on May 31?

Answer 1

Answer:

A. 3200 ; 900

Explanation:

First, the multiple Choices for the question

A. 3200 ; 900

B. 2900 ; 1200

C. 1200 ; 2900

D. 1700 ; 1200

E. 4100 ; 0

SOLUTION

This is a job order costing question and  Job order costing represents a cost accounting method where for each job, the cost is accumulated such that the cost for the job, work order and the project are separately accumulated.

1) The question is to determine the Cost of Goods sold for May

The formula = Cost of Job 134 + Cost of Job 135

= The cost of Job 134 = $1,700

The cost of Job 135 = Balance Ma y 1 + May Production Costs = $1,200 + $300

= $1500

= $1,700 + $1,500 = $3,200 - Cost of Goods sold for May

2) The WIP Inventory cost on 31st May

This is simply asking for the cost of Job 136, this is because Jobs 134 and 135 were completed during the month and Shipped to the Customer that same month

Hence the Work in Progress Inventory Cost on 31st May = $900