Question

Refer to the information in QS 15-9. During the month, the jobs used direct labor as shown below. Jobs 1 and 3 are not finished by the end of March, and Job 2 is finished but not sold by the end of March.

(1) Determine the amounts of direct materials, direct labor, and factory overhead applied that would be reported on job cost sheets for each of the three jobs for March.

(2) Determine the total dollar amount of Work in Process Inventory at the end of March.

(3) Determine the total dollar amount of Finished Goods Inventory at the end of March. Assume the company has no beginning Work in Process or Finished Goods inventories.

	Job 1	Job 2	Job 3
Direct labor used	\(9,000	\)4,000	$3,000

Short answer

1. Total cost of each job:

Particulars	Job 1	Job 2	Job 3
Total cost	$16,000	$13,800	$5,100

2.Work-in-process inventory: $21,100.

3. Finished goods inventory: $13,800.

Step-by-step solution

Definition of Finished Goods Inventory

Finished goods inventory refers to the account that reports the cost incurred in the goods ready for sale. This account is reported as a resource of the business entity.

Direct material, direct labor, and factory overhead applied

	Job 1	Job 2	Job 3
Direct material	$5,000	$7,000	$1,500
Direct labor	9,000	4,000	3,000
Factory overhead	2,000	2,800	600
Total cost	$16,000	$13,800	$5,100

Work-in-process ending inventory

Particular	Amount $
Cost of Job 1	$16,000
Cost of Job 3	5,100
Work-in-process inventory	$21,100

Finished goods ending inventory

Finished goods inventory includes the total cost of Job 2 $13,800.