Sportly Inc. completed Job No. B14 during 2017. The job cost sheet listed the following: $$\begin{array} { l r }
\text { Direct materials } & \$ 110,000 \
\text { Direct labor } & \$ 60,000 \
\text { Manufacturing overhead applied } & \$ 40,000 \
\text { Units produced } & 3,000 \text { units } \
\text { Units sold } & 1,800 \text { units }
\end{array}$$ How much is the cost of the finished goods on hand from this job?

Question

Sportly Inc. completed Job No. B14 during 2017. The job cost sheet listed the following: $$\begin{array} { l r } 
\text { Direct materials } & \$ 110,000 \
\text { Direct labor } & \$ 60,000 \
\text { Manufacturing overhead applied } & \$ 40,000 \
\text { Units produced } & 3,000 \text { units } \
\text { Units sold } & 1,800 \text { units }
\end{array}$$ How much is the cost of the finished goods on hand from this job?

Quizplus · Accepted Answer

The cost of the finished goods on hand is calculated by first determining the total cost of the job and then finding the cost per unit. The total cost is the sum of direct materials, direct labor, and manufacturing overhead, which is $110,000 + $60,000 + $40,000 = $210,000. The cost per unit is $210,000 / 3,000 units = $70 per unit. Since 1,200 units (3,000 units produced - 1,800 units sold) are still on hand, the cost of the finished goods on hand is 1,200 units * $70 = $84,000.

Sportly Inc How Much Is the Cost of the Finished Goods on Cost