Figure 2 Alana Company had three jobs in process at the end of September. They w

Question

Figure 2

Alana Company had three jobs in process at the end of September. They were as follows:

  Job No. 4     Job No. 5     Job No. 6

   Direct materials       $64,000       $36,000      $50,000

   Direct labor          $128,000      $106,000      $80,000

   Machine hours            2,400         1,600        2,000

Alana uses a predetermined overhead rate of $20 per machine hour to apply overhead.

All three jobs were started during September. Job No. 5 and Job No. 6 were completed during the month, and Job No. 6 was sold on September 20.

There were no beginning inventory balances.

q1 Refer to Figure 2. Alana’s cost of goods sold for September would be

Refer to Figure 2. Alana’s ending finished goods inventory for September would be

Refer to Figure 2. Alana’s ending work-in-process inventory for September would be

Explanation / Answer

Job No 4 Job No. 5 Job No. 6 Machine hours 2400 1600 2000 Direct material 64000 36000 50000 Direct labour 128000 106000 80000 factory Overhead(@20 per machine hour) 48000 32000 40000 Total cost incurred 240,000 174,000 170,000 Job No. 6 has been completed and sold. Therefore, cost of goods sold is a cost of Job No.6 Cost of Goods sold= Cost of Job No. 6 =   $ 170,000 Job No. 5 has laso been completed but not sold. Hence,it will be in Ending Finished Goods Inventory Cost Of Ending Finished Goods= Cost of Job No. 5=    $ 174,000 Job No. 4 has not been completed till month end. Hence it will be a work in process ending balance. Cost of Ending Work in process = Cost of Job no. 4 =    $240,000

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