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	$	5,800
Charged to the job during May
Direct materials	$	9,100
Direct labor	$	2,800
Manufacturing overhead applied	$	4,800
Units completed		180
Units in process at the end of May		0
Units sold during May		80

In May, overhead was overapplied by $380. 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?

         

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

      

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

     

Answer 1

1
Beginning Balance	5800
ADD: Direct Materials	9100
ADD: Direct Labor	2800
ADD: Manu. Overhead Applied	4800
TOTAL costs of the job (a)	22500
Units completed (b)	180
Unit Product cost (a) / (b) = C	125
Units sold (d)	80
Unadjusted cost of goods sold (c) X (d)	10000
Less: Overapplied overhead	380
Cost of goods sold	9620
2
Units completed	180
Less: units sold	80
Units in ending inventory (a)	100
Unit Product Cost (b)	125
Total cost of ending finished goods inventory (a) X (b)	12500
3
0
work in process inventory at the end of May