1) Five jobs were worked on this month. Balances are as follows: Job 356, $450; Job 357, $1235; Job 358, $378; Job 359, $689; Job 360, $456. Jobs 356, 357, 358, and 359 were completed but not sold. Job 360 has not yet been completed. Required: Compute the value of the finished goods inventory.

Question

1) Five jobs were worked on this month. Balances are as follows: Job 356, $450; Job 357, $1235; Job 358, $378; Job 359, $689; Job 360, $456. Jobs 356, 357, 358, and 359 were completed but not sold. Job 360 has not yet been completed. Required: Compute the value of the finished goods inventory.

2) Refer to #1. Compute the value of the work in process inventory.

3) Beginning Inventory: 100 units @ $1 = $100

First Purchase: 200 units @ $2 = $400

Second Purchase; 300 units @ $3 = $900

Third Purchase: 400 units @ $4 = $1600

Ending Inventory: 200 units

Required: Based on the above data, compute the value of the ending inventory, using the FIFO method.

4) Refer to #3. Compute the value of the ending inventory, using the LIFO method.

5) Refer to #3. Compute the value of the ending inventory, using the weighted average method.

Answer 1

1) To compute the value of the finished goods inventory, you need to add up the balances of the completed jobs. The completed jobs are Job 356, Job 357, Job 358, and Job 359. Calculate the sum of their balances:

$450 + $1235 + $378 + $689 = $2752

So, the value of the finished goods inventory is $2752.

2) To compute the value of the work in process inventory, you need to consider the balance of the job that has not yet been completed, which is Job 360. The value of the work in process inventory is the balance of Job 360.

The balance of Job 360 is $456, so the value of the work in process inventory is $456.

3) To compute the value of the ending inventory using the FIFO method, you need to consider the order in which the units were purchased. FIFO stands for "First In, First Out".

First, calculate the cost of units sold by subtracting the ending inventory from the total units purchased:

100 + 200 + 300 + 400 - 200 = 800 units sold

Next, calculate the cost of units sold using the FIFO method. This means you assume that the first units purchased are the first ones sold.

100 units x $1 = $100
200 units x $2 = $400
300 units x $3 = $900
The remaining 200 units are the ending inventory.

Now, add up the costs:

$100 + $400 + $900 = $1400

So, the value of the ending inventory using the FIFO method is $1400.

4) To compute the value of the ending inventory using the LIFO method, you assume that the last units purchased are the first ones sold.

Using the same calculation as in question #3, the cost of units sold is 800 units.

400 units x $4 = $1600
300 units x $3 = $900
100 units x $2 = $200
The remaining 200 units are the ending inventory.

Add up the costs:

$1600 + $900 + $200 = $2700

So, the value of the ending inventory using the LIFO method is $2700.

5) To compute the value of the ending inventory using the weighted average method, you need to calculate the weighted average cost per unit by dividing the total cost of units available for sale by the total units available for sale:

Total cost of units available for sale: (100 x $1) + (200 x $2) + (300 x $3) + (400 x $4) = $1600 + $400 + $900 + $1600 = $4500

Total units available for sale: 100 + 200 + 300 + 400 = 1000 units

Weighted average cost per unit: $4500 / 1000 = $4.50

Now, calculate the value of the ending inventory by multiplying the weighted average cost per unit by the remaining units:

200 units x $4.50 = $900

So, the value of the ending inventory using the weighted average method is $900.