Tomlison Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: The journal entry to record the unadjusted Cost of Goods Sold is:

Question

Tomlison Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year:  The journal entry to record the unadjusted Cost of Goods Sold is:

Quizplus · Accepted Answer

The unadjusted Cost of Goods Sold for a job-order costing system is calculated as beginning work in process inventory plus total manufacturing costs minus ending work in process inventory. Using the data provided in the table, the calculation would be as follows:

Beginning work in process inventory: $0 
Direct materials used: $534,000 
Direct labor: $330,000 
Manufacturing overhead: $360,000 
Total manufacturing costs: $1,224,000 
Ending work in process inventory: $144,000 
Unadjusted Cost of Goods Sold: $1,080,000

Therefore, the journal entry to record the unadjusted Cost of Goods Sold would be:

Debit Cost of Goods Sold: $1,080,000 
Credit Finished Goods Inventory: $1,080,000

Choice B is the correct option.

Tomlison Corporation Is a Manufacturer That Uses Job-Order Costing