Question

Problems Group A 284 Analyzing cost data, recording completion and sales of jobs Go Brandon Manufacturing makes carrying cases for portable electronic devices. Its * costing records yield the following information: Total Manufacturing Costs Added in November Job No. Started Total Date Cost of Job finished Sold at October 31 10/12 10/13A $1,000 (10/30 - 11/01 ' 1,300 11/24 11/27 600 11/29 12/03 500 11/12 11/14 12/06 12/09 10/03 10/03 10/17 10/29 11/08 11/23 13 $ 800 1,600 350 100 6 Requirements 1. Which type of costing system is Brandon using? What piece of data did you base your answer on? Joborder or Process costing iub has a specific date 2. Use the dates in the table to identify the status of each job at October 31 and November 30. Compute Brandon's account balances at October 31 for Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. Compute, by job, account balances at November 30 for Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. 13. Prepare journal entries to record the transfer of completed jobs from Work-in-proce Inventory to Finished Goods Inventory for October and November. 4. Record the sale of Job 3 for $2,400 on account. 5. What is the gross profit for Job 3?

Answer 1

1.

The costing method used here is job order costing system because it is clear from the data given that costs here are accumulated for each job separately.

2.

Account balances are as follows:

Brandon Manufacturing
Account balances
Date	WIP inventory		Finished goods inventory		Cost of goods sold
	Job	Cost	Job	Cost	Job	Cost
31-Oct	3	600	2	1300	1	1000
	4	500
Total		1100		1300		1000
30-Nov	6	100	4	2100	2	1300
					3	1400
					5	350
Total		100		2100		3050

3.

Journal entry:

Date	Accounts name and explanation	Debit	credit
31-Oct	Finished goods inventory (JOB 1,2)	2300
	WIP inventory		2300
30-Nov	Finished goods inventory (JOB 3,4,5)	3850	3850
	WIP inventory

4.

Date	Accounts name and explanation	Debit	credit
30-Nov	Accounts receivable	2400
	Sales revenue		2400
30-Nov	Cost of goods sold	1400
	Finished goods inventory		1400

5.

Gross profit = Sales revenue - Cost of goods sold

Gross profit = $2400 - 1400

Gross profit = $1000