Question

Use the following data to answer the next THREE questions: Nellis Manufacturing uses a job-order costing system to account for costs of its jobs. As of the beginning of April the company had two jobs already in progress (jobs 401 and 402). Below are the costs incurred to date on each of these jobs Job 401 Job 402 Beginning Work-in-Process $ 23,000 $ 6,500 During the month of April the company started two more jobs (jobs 403 and 404). Below is a summary of the relevant information for all four jobs during the month of April: Job 401 Job 402 Job 403 Job 404 Direct Materials Used $ 1,350 $ 3.000 $ 25,000 $ 4,750 Direct Labor Costs $ 5,000 $ 8,500 $ 59,000 $ 1,680 Applied OH costs $ 1.500 $ 2.550 $ 17700 $ 550 Units Completed 100 units 240 units 1,000 units O units Units Still in Process O units O units O units 60 units Units Sold O units O units 400 units O units On April 1st, the finished goods inventory was zero. As indicated in above table, during April, the company completed jobs 401, 402, and 403. Job 404 is incomplete by the end of April. The company only sold 400 units of Job 403 during April. 1. What is Nellis's Cost of Goods Manufactured for April? O $160,080 $6.980 $123,600 $153,100 $130,580 2. What is Nellis's Work-in-Process Inventory at the end of April? $29,500 $36,480 $6,980 $160,080 $152100

Answer 1

1) 2) 3) Cost of Goods Manufactured Ending Work-in-Process Inventory Cost of Goods Sold (Unadjusted) $153,100 --> Option-(d) $6,980 --> Option-(c) $40,680 --> Option-(a) Workings: Cost of Goods Manufactured is equal to costs incurred for units completed including beginning work in process. Beginning Direct Direct Applied Total WIP balance Materials Labor OH Costs Costs Job 401 $23,000 $1,350 $5,000 $1,500 $30,850 Job 402 $6,500 $3,000 $8,500 $2,550 $20,550 Job 403 $0 $25,000 $59,000 $17,700 $101,700 1) Cost of Goods Manufactured for the period $153,100 Cost of ending Work in Process inventory includes cost of uncompleted work at the end of the period. That is, Direct Direct Applied Total Materials Labor OH Costs Costs Job 404 $4,750 $1,680 $550 $6,980 Cost of Goods Sold includes cost of completed and sold units out of total units completed. That is, Direct Direct Applied Total Materials Labor OH Costs Job 403 $25,000 $59,000 $17,700 $101,700 --> For 1,000 units. So, COGS for 400 units = $40,680 [($101700 / 1,000) x 400] Costs