CORNERSTONE 5.2
The How and WHY of using a Job order Cost Sheet to the Balances of Work in Process, Finished Goods, and Cost of Goods Sold
Information
(We use the same data as cornerstone 5.1. All Round Fence company installs fences for homeowners and small commercial firms. During March, All Round work d three jobs Completed job order cost sheets for March (from Cornerstone s follow
Job 64 Job 63 Job 62
Beginning balance S 620
Materials requisitioned 3.000 4,600 4.900
Direct labor cost
Applied overhead
Total cost
During March, Job 62 was completed and sold at 125 percent of cost. Jobs 63 and 64 remain unfinished at the end of the month.
Why
Since all costs are tracked by job, the balance in Work in Process can be computed by summing the costs of all incomplete jobs. The amount added to Finished Goods is the sum of jobs completed but not sold Cost of Goods Sold must be the total cost of all jobs sold during the month
Required:
1. What is the ending balance of Work in Process for March?
2. Assume that the March I balance of Finished Goods was zero. What is the ending balance of Finished Goods for March?