Carver Test Systems Manufactures Automated Testing Equipment By the End of the First Month (January), All Jobs

question 94

Essay

Carver Test Systems manufactures automated testing equipment.The company uses a job-order costing system and applies overhead on the basis of machine hours (MH).At the beginning of the year,estimated manufacturing overhead was $1,960,000,and the estimated machine hours was 98,000.Data regarding several jobs at Carver are presented below.
$\begin{array}{l}\begin{array}{lll}\\\text { Job Number}\\\text { XJ-107}\\\text { ST-211}\\\text { XI-108}\\\text { SL-205}\\\text { RX-115}\\\end{array}\begin{array}{lll}\text { Beginning } & \text { Direct } \\\text { Balance } &\text { Materials }\\\$ 118,600 & \$ 4,000 \\121,450 & 2,500 \\21,800 & 86,400 \\34,350 & 71,800\\&18,990\end{array}\begin{array}{cc}\text { Direct } & \text { Machine } \\\text { Labour } & \text { Hours } \\\$ 8,400 & 150 \\12,160 & 300 \\36,650 & 3,100 \\32,175 & 2,700 \\21,845 & 1,400\end{array}\end{array}$
By the end of the first month (January), all jobs but RX-115 were completed, and all completed jobs had been delivered to customers except for SL-205.
Required:
What was the balance in Finished Goods inventory at the end of January?

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Definitions:

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous accounting period, simplifying the recording of transactions.

Liability Account

An account on a company's balance sheet that records debts or obligations the company needs to pay in the future.

Adjusting Entry

Accounting entries recorded at the close of an accounting cycle to distribute expenses and revenues to the period they truly belong to.

Consulting Services

Professional advisory services provided to businesses and organizations to improve operations, strategy, and financial performance.