Michelle's has the following transactions for the month of October:
1.Purchased materials on account for $111,482.
2.Materials requisitioned for $82,383.
3.Direct labour of $51,000 was incurred (but not yet paid).
4.Actual overhead for the month was $33,000. It has not been paid yet (charge to various payables).
5.Overhead is applied to production at the rate of 70% of direct labour.
6.Jobs totalling $56,000 were transferred from work in process to finished goods.
7.Jobs costing $41,000 were sold.Balances at the beginning of the month were:
$\begin{array}{lr}
\text { Materials } & \$ 17,890 \
\text { Work in process } & 0 \
\text { Finished goods } & 8,321
\end{array}$
-Refer to the Figure.What is the ending balance of finished goods?

Question

Michelle's has the following transactions for the month of October:
1.Purchased materials on account for $111,482.
2.Materials requisitioned for $82,383.
3.Direct labour of $51,000 was incurred (but not yet paid).
4.Actual overhead for the month was $33,000. It has not been paid yet (charge to various payables).
5.Overhead is applied to production at the rate of 70% of direct labour.
6.Jobs totalling $56,000 were transferred from work in process to finished goods.
7.Jobs costing $41,000 were sold.Balances at the beginning of the month were:
 $\begin{array}{lr}
\text { Materials } & \$ 17,890 \
\text { Work in process } & 0 \
\text { Finished goods } & 8,321
\end{array}$
-Refer to the Figure.What is the ending balance of finished goods?

Quizplus · Accepted Answer

The ending balance of finished goods is calculated as follows: Beginning balance of finished goods = $8,321 + Jobs transferred from work in process to finished goods = $56,000 - Jobs sold = $41,000 Ending balance of finished goods = $8,321 + $56,000 - $41,000 = $23,321.