Question

Morrow Corporation had only one job in process during May—Job X32Z—and had no finished goods inventory on May 1. Job X32Z was started in April and finished during May. Data concerning that job appear below:
Job X32Z
Beginning balance $ 7,000
Charged to the job during May
Direct materials $ 12,600
Direct labor $ 3,500
Manufacturing overhead applied $ 6,900
Units completed 250
Units in process at the end of May 0
Units sold during May 115
In May, overhead was overapplied by $450. The company adjusts its cost of goods sold every month for the amount of the overhead that was underapplied or overapplied.

Required:

1. Using the direct method, what is the cost of goods sold for May?

Cost of good sold: ______

2. What is the total value of the finished goods inventory at the end of May?

Total cost of ending finished good inventory: ______

3. What is the total value of the work in process inventory at the end of May?

Ending work in process inventory: _______

Answer 1

Answer:

1      Cost of goods sold      $ 13,350

2.    Value of finished goods ending inventory  $ 16,200  

3.    Value of work in process inventory  $ 0

Explanation:

Computation of cost of goods sold

Determination  of per unit cost

Opening balance                                                                      $  7,000

Direct Materials                                                                         $ 12,600

Direct Labour                                                                             $  3,500

Manufacturing overhead applied                                             $  6,900

Total cost of Job X32Z                                                              $ 30,000

Units completed                                                                                 250

Cost per unit                                                                                   $ 120

Units sold                                                                                          115 units

Cost of goods sold $ 120 * 115                           $ 13,800

Add; Adjustment for over applied overhead     $ (   450)

Cost of goods sold                                                                        $ 13,350  

Computation of Finished Goods Inventory value

Units produced                                                           250

Units sold                                                                     115

Units in ending inventory                                           135        

Cost per unit                                              $ 120 per unit

Value of ending inventory    $ 120 unit * 135 units                     $ 16,200

Computation of Work in process inventory

There are no units in process at the end of May, so there is no work in process. so then value is $ 0