Question

In: Accounting

Thing Co. uses a job order costing system. At the beginning of July, the company had...

Thing Co. uses a job order costing system. At the beginning of July, the company had the following job in progress:

Job 70

$16539


During July, Thing Co. incurred the following job related costs:

Direct Materials

Direct Labour

Job 70

$2740

$1163

Job 80

12316

16294

Job 90

8248

7908


Manufacturing overhead is applied at a rate of $3.79 per $1 of direct labour cost. Jobs 70 and 90 were moved to finished goods during the month, but neither was sold by the end of the month. Job 80 is still in progress.

What would the debit to Finished Goods Inventory be for the month of July?

Select one:

a. $36598

b. $115214

c. $70977

d. $54438

Solutions

Expert Solution

Job 70 Job 90
Opening work in process $                                 16,539
Add: Direct material added during the month $                                    2,740 $                                      8,248
Add: Direct labour added during the month $                                    1,163 $                                      7,908
Add: Manufacturing overhead applied during the month $3.79*$1,163 = $4,407.77 $3.79*$7,908 = $29,971.32
Total manufacturing cost $                           24,849.77 $                              46,127.32
Debit finished good inventory $ 70,977.09
Credit work in process inventory - Job 70 $ 24,849.77
Credit work in process inventory - Job 90 $ 46,127.32

Answer is: c. $70,977

ekkarill92 answered 2 years ago
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