Morrow Corporation had only one job in process during May—Job X32Z—and had no fi

Question

Morrow Corporation had only one job in process during May—Job X32Z—and had no finished goods inventory on May 1. Job X32Z was started in April and finished during May. Data concerning that job appear below:        

In May, overhead was overapplied by $380. The company adjusts its cost of goods sold every month for the amount of the overhead that was underapplied or overapplied.  

Required:  

1. Using the direct method, what is the cost of goods sold for May?

         

2. What is the total value of the finished goods inventory at the end of May?

      

3. What is the total value of the work in process inventory at the end of May?

     

Job X32Z Beginning balance $ 5,800 Charged to the job during May Direct materials $ 9,100 Direct labor $ 2,800 Manufacturing overhead applied $ 4,800 Units completed 180 Units in process at the end of May 0 Units sold during May 80

Explanation / Answer

1 Beginning Balance 5800 ADD: Direct Materials 9100 ADD: Direct Labor 2800 ADD: Manu. Overhead Applied 4800 TOTAL costs of the job (a) 22500 Units completed (b) 180 Unit Product cost (a) / (b) = C 125 Units sold (d) 80 Unadjusted cost of goods sold (c) X (d) 10000 Less: Overapplied overhead 380 Cost of goods sold 9620 2 Units completed 180 Less: units sold 80 Units in ending inventory (a) 100 Unit Product Cost (b) 125 Total cost of ending finished goods inventory (a) X (b) 12500 3 0 work in process inventory at the end of May

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