Windows of the World (WOW) produces decorative windows in several styles and fin

Question

Windows of the World (WOW) produces decorative windows in several styles and finishes. The company uses a job order costing system to accumulate product costs. Because much of the production process is automated, WOW has selected machine hours as its overhead application base. In May, WOW worked on three jobs. Job 69 was started in April and completed and delivered to customers in May. Job 70 was started and finished in May, and at the end of May, the windows from the job were in the warehouse. Job 71 was starter at the end of May. Required a. Calculate the total cost of each of the three jobs as end of May. b. Calculate the balance in the Work in Process Inventory account at the end of May c. Calculate the Finished Goods Inventory balance at the end of May.

Explanation / Answer

69 70 71 Cost added in April Direct Material $ 10,000 Direct Labor $    1,000 Overhead $       450 Cost added in May Direct Material $    5,000 $    8,000 $    4,000 Direct Labor $ 24,000 $ 12,000 $        500 Machine Hours $ 27,000 $ 22,500 $        675 Total Cost $ 67,450 $ 42,500 $    5,175 a Finished Goods Inventory WIP c b

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