Question

On March 1 a dressmaker starts work on three custom-designed wedding dresses. The company uses job order costing and applies overhead to each job (dress) at the rate of 54% of direct materials costs. During the month, the jobs used direct materials as shown below.

	Job 1	Job 2	Job 3
Direct materials used	$6,400	$8,400	$2,900

During the month, the jobs used direct labor as shown below. Jobs 1 and 3 are not finished by the end of March, and Job 2 is finished but not sold by the end of March.

	Job 1	Job 2	Job 3
Direct labor used	$9,300	$5,000	$4,000

1.	Determine the amounts of direct materials, direct labor, and factory overhead applied that would be reported on job cost sheets for each of the three jobs for March.

     

2.	Determine the total dollar amount of Work in Process Inventory at the end of March.

     

3.	Determine the total dollar amount of Finished Goods Inventory at the end of March. Assume the company has no beginning Work in Process or Finished Goods inventories.

Answer 1

( A )		JOB 1($)	JOB 2($)	JOB 3($)
	DIRECT MATERIAL	6400	8400	2900
	DIRECT LABOUR	9300	5000	4000
	OVERHEAD	3456	4536	1566
	(54% OF D.M)
	TOTAL COST	19156	17936	8466
( B )	WORK IN PROGRESS INVENTORY($)	19156	-	8466
( C )	FINISHED GOODS INVENTORY($)	-	17936	-