Question

Spruce Inc. completed Job No. A20 during 2020. The job cost sheet listed the following: Job No. A20 Costs for 5000 units produced: Direct materials $30,000 Direct labor $45,000 Manufacturing overhead applied $20,000 Units sold 2,000 units How much is the cost of the finished goods on hand at the end of the period from this job? $30,000 $57,000 $38,000 $45,000

Answer 1

Answer: Corret option b. $ 57,000

Calculation of cost of the finished goods on hand at the end of the period is as follows:

Cost of finished goods = ( Total cost / units produced ) * Ending inventory

= ( $ 95,000 / 5,000 units ) * 3,000 units

= $ 57,000

Thus, Cost of the finished goods on hand at the end of the period is $ 57,000

Working note:

Total cost = Direct materials + Direct labor +Manufacturing overhead

= $ 30,000 + $ 45,0000 + $ 20,000

= $ 95,000

Ending inventory = Units produced - Unit sold

= 5000 units - 2000 units

= 3000 units