rerpetuar inventories The following summary data are from the job order cost she

Question

rerpetuar inventories The following summary data are from the job order cost sheets of Total Production Costs Added in May Dates Total costs Assigned Job Started Finished Shippedat April 30 4/10 4/205/9 4/18 4/305/20 4/245/105/25 4/28 5/20 5/15 6/106/20 5/22 6/186/28 $14,600 10,800 5,800 7,200 $11,400 9,600 5,200 7,600 6/3 Using the above data, compute (a) the finished goods inventory at May 1 and May 31,(b) the work in process inventory at May 1 and May 31, and (c) the cost of goods sold for May. Hampton began operations with Job 1 a. Finished goods inventory at May 1 0 Finished goods inventory at May 31 $ b. Work in process inventory at May 1 s Work in process inventory at May 31 s $ o c. Cost of goods sold for May

Explanation / Answer

Finished goods inventory at May 1 will be those goods which were started in April and finished in April as per the above box the

1. Cost of Inventory at MAy 1 = $14,600 + $10,800 = $25,400 finished in april shipped in may

Cost of inventory at may 31 = $7,200 + 9,600 = $16,800 finished in may and shipped in june

2. WIP value of inventory at May 1 = 5,800 + 7,200 = $13,000 work started in april finished in may

WIP value of inventory at may 31= $5,200 + $7,600 = $12,800 this will be the scenario where the work started in may ended in june

3. COGS of goods sold in may will be = Costs incurred in April, + Costs incurred in May for all the goods shipped in May

= 14,600 + 10,800 + 5,800 + 11,400 = $42,600

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