Question

ABC Company uses a job-order costing system and applies
overhead costs to jobs using a plant-wide rate of 60%
of direct materials cost. ABC Company had four jobs in
process at June 1 (Jobs #1, #2, #3, and #4). Information
related to the four jobs appears below:

                                   Job #1       Job #2
beginning work in process .....    $2,500       $1,900

COSTS ADDED DURING JUNE
direct materials ..............    $  800       $  600
direct labor ..................    $  700       $1,780


                                   Job #3       Job #4
beginning work in process .....    $1,000       $  800

COSTS ADDED DURING JUNE
direct materials ..............    $1,500       $1,200
direct labor ..................    $1,920       $2,250

By the end of June, Jobs 2 and 3 had been completed. In
addition, 1,100 of the units from Job 2 have been sold
and 700 of the units from Job 3 were sold. Assume Job 2
consisted of a total of 1,600 units and Job 3 consisted
of a total of 2,000 units. The actual overhead cost for
June totaled $1,590. 

Calculate ABC Company's finished goods inventory balance
at June 30.

Calculate ABC Company's cost of goods sold for June after
the overhead variance has been closed.

Answer 1

June Job card
	Job # 1	Job # 2	Job # 3	Job # 4	Total
Opening	2,500	1,900	1,000	800
Material added	800	600	1,500	1,200
labour	700	1,780	1,920	2,250
Overhead (60% of Material)	480	360	900	720	2,460
	4,480	4,640	5,320	4,970
Units Finished		1,600	2,000
Unit sold		1,000	700
Finished units stock		600	1,300
Cost of finished units		1,740	3,458		5,198
(Total cost* stock units/total units)

Cost of Finished goods Inventory = $5,198

Cost of units sold
Job # 2 (1000*4640/1600)	2,900
Job # 3 (700*5320/2000)	1,862
Less: Overhead variance	870
(Applied - actual)
($2,460 - $1,590)
Cost of units sold	3,892

Cost of units sold after variance close = $3,892