Calculating Inventory
Finlon Upholstery Inc. uses a job-order costing system to accumulate manufacturing costs. The company’s work-in-process on December 31 2001 consisted of one job (no. 2077) which was carried on the year-end balance sheet at $156800. There was no finished-goods inventory on this date.
Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company’s practical capacity in terms of direct-labor hours multiplied by the budgeted direct-labor rate.) Budgeted totals for 2002 for direct labor and manufacturing overhead are $4200000 and $5460000 respectively. Actual results for the year are as follows:
Job no. 2077 was completed in January 2002 and there was no work in process at year-end. All jobs produced during 2002 were sold with the exception of Job no. 2143 which contained direct-material costs of $156000 and direct-labor charges of $85000. The company charges any under- or over-applied overhead to the cost of goods sold category.
Using the above information do the following:
Perform your calculations in an Excel spreadsheet and copy the calculations into a Word document.
Write a 1-page paper in Word format. Apply APA standards to citation of sources.