Question

Sheds, Inc. designs and builds sheds and outbuildings for individual customers.
The company uses a job cost system and treats each customer's order as a separate job.
At the beginning of January the company had the following raw material inventory:						$600
At the beginning of January the company had the following work-in-process inventories:
Job 21	$13,000
Job 25	$9,000
During January, the following activities took place:
1. Started jobs 26 and 27.
2. Purchased raw materials in January:		$12,000
Requisitioned (or used) the following raw materials to the specific jobs:
Job 21	$2,000
Job 25	$5,000
Job 26	$1,000
Job 27	$3,000
3. Incurred January manufacturing payroll:
Direct Labor
Job 21	$750
Job 25	$2,000
Job 26	$900
Job 27	$1,500
Indirect labor	$600
4. Incurred additional manufacturing overhead costs for January:
Production equipment rent				$2,000
Manufacturing supplies purchased and used				$800
Factory utilities				$500
5. Applied manufacturing overhead using a predetermined rate based on predicted annual overhead
and predicted annual direct material cost as follows:
Predicted Annual Overhead		$48,000
Predicted Annual Direct Material cost		$120,000
6. Completed jobs 25 and 27.
7. Customer for Job 27 picked up completed job and was billed the following:
Job 27	12,000
8. The company had the following period costs that they incurred:
Sales commissions		$2,000
Administrative salaries		$3,000

-Determine the Finished Goods for January and provide the number of the Jobs in Finished Goods at the end of January and determine the total cost of ending finished goods for January.

-Determine the Cost of Goods Sold for January and provide the number of the Jobs in Cost of Goods Sold for January and determine the total cost of goods sold for January.

-Determine the ending Work-In-Process Inventory at the end of January and provide the number of the Jobs still in Work-in-Process at the end of January and the determined total cost of ending work in process for January.

Answer 1

			Job Sheet
				job 21	job 25	job26	job 27	total
	Beginning work in process			13,000	9,000			22,000
	Cost added during Jan
	Direct materials			2,000	5,000	1,000	3,000	11,000
	Direct labor			750	2,000	900	1,500	5150
	overhead applied			800	2000	400	1200	4400
	total cost added during Jan			3,550	9,000	2,300	5,700	20,550
	total cost			16,550	18,000	2,300	5,700	42,550
	overhead rate = estimated overhead/estimated direct material cost
			48,000/120,000
			0.4
	completed jobs 25&27 =			23,700	(18000+5700)
	cost of goods sold (job 27)			5,700
	WIP (job 21& job 26)			18,850	(16,550+2300)
1)	Finished goods for january			$23,700
	number of jobs in finished at end of Janaury       job 25 that is one job
	total cost of ending finished goods for jan				$18,000
2)	Cost of goods sold for jan			$5,700
	number of jobs in cogs at end of Janaury       job 27 that is one job
	total cost of goods sold for Jan			$5,700
3)	Work in process inventory for jan				$18,850
	number of jobs still in WIP at end of Janaury       job 21&job 26 that is 2 jobs
	total cost of ending Work in process inventory					18,850