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Umdhloti House Repairs Ltd uses a job costing system to account for household repair jobs that...

Umdhloti House Repairs Ltd uses a job costing system to account for household repair jobs that the company undertakes in the KwaZulu Natal Province. Each job is unique and based on the requirements of the specific client. The following information relates to the company for the year ended 31 May 2018.
On 1 June 2017, direct materials of R8000 were in inventory.
During the year ended 31 Mayb 2018, additional direct materials of R120 000 were purchased.
Direct materials with a total cost of R117 000 were issued to jobs during the year ended 31 May 2018 (this amount includes the direct material issues to all jobs that the company worked on during the year ended 31 May 2018).
No indirect inventory is kept.
The company uses absorption costing. Fixed manufacturing overheads are allocated to jobs based on direct labour hours. The total budgeted fixed manufacturing overheads for the company for the year ended 31 May 2018 were R54 000 and the total budgeted direct labour hours of the compnay for the year ended 31 May 2018 were 1000.
On 1 June 2017 the value of opening WIP was R24000.
On 31 May 2018 only one job was still work-in-progress and the variable costs incurred on this job up to date at 31 May 2018 were as follows:
Direct Material(incl in R117000 total issues)    R3000
Direct Labour (for 30hours)                                   R1500
Variable manufacturing overheads                      R200

On 31 May 2018 only one completed job that the company worked on during the year ended 31 May 2018 was not yet invoiced to the client. The job will only be sold to the client in July 2018 at a selling price of R4300 and a gross profit of R800.

Calculate the total value of all the closing inventory of Umdhloti House Repairs Lts as at 31 May 2018

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Hey learner! if you have any doubt regarding this answer, feel free to ask me so that i can help you better.

Following is the calculation of value of all the ending inventory.

ekkarill92 answered 1 year ago
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