Jackson Company applies overhead to products using a pre-determined rate of $11.

Question

 Jackson Company applies overhead to products using a pre-determined rate of $11.20 per direct labor hour.  During 2019, Jackson Company began work on three jobs. Information relating to these three jobs appears below:                                    Job #359      Job #360      Job #361 direct materials ..............    $98,000       $75,000       $91,000 direct labor cost .............    $98,600       $79,900       $86,700 direct labor hours ............      5,800         4,700         5,100  By the end of 2019, job #359 and job #361 had been completed. Job #360 was not completed by the end of 2019. Additionally, by the end of 2019, job #361 had been sold while job #359 was not sold. Jackson Company had total actual overhead cost of $169,000 during 2019.  Calculate the amount of finished goods inventory reported in Jackson Company's December 31, 2019 balance sheet.

Explanation / Answer

Calculate finished goods inventory :

Job 359 Direct material 98000 Direct labour 98600 Overhead applied (5800*11.20) 64960 Total finished goods inventory 261560

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