Cake Co. uses job order costing and begins the period with no finished goods inventory, but with
Question:
Cake Co. uses job order costing and begins the period with no finished goods inventory, but with a beginning workinprocess (WIP) of these jobs:
Job #15 = $42,000
Job #16 = $33,000
Job #17 = $12,000
Total WIP = $87,000
During the period, a new job is started (Job #18) and these costs are incurred:
-Direct materials: $100,000 (20% each for Jobs #15, #16, #17 and 40% for Job #18)
-Direct labor: 5,000 hours at $15 per hour (hours for Jobs #15, #16, #17, and #18 are 1,500, 1,500, 1,200, and 800, respectively)
-Factory overhead (using a predetermined rate where total overhead for the year is estimated to be $200,000 and total direct labor (cost driver) is 50,000 hours).
Jobs #15 and #16 are completed and sold during the period. What is ending WIP inventory for Cake Co.?
Expert Answer:
To calculate the ending workinprocess WIP inventory for Cake Co we need to consider the costs incurred and allocate them to the respective jobs Lets b... View the full answer
