Answer:
Cost of finished goods on hand = $78,000
Explanation:
<em>Job costing is appropriate where goods or contracts are done to meet customers specific and unique requirements. Each customer's job is different from the other.</em>
To determine cost per unit cost job, we use the formula :
<em>= (D.material cost + Direct labour cost + Overhead)/ No of units</em>
We can work out the cost per unit for Job No; 402 as follows:
Step 1
<em>Calculate the closing inventory</em>
Closing inventory = Opening inventory + Production - Sales
= 0 + 5000 - 4000 = 1000
Step 2
<em>Calculate the the cost per unit</em>
= $(120,000 + 180,000 + 90,000)/ 5000 units
= $78 per unit
Step 3
<em>Value the closing inventory </em>
= unit cost × inventory units
= $78 × 1,000
= $78,000
Cost of finished goods on hand = $78,000
