Computation of Sales Price, Work-in-Process Inventory, and Finished Goods Inventory The Connie Company manufactures a single product using a job order cost system. It charges actual factory overhead to individual jobs at the end of each month in proportion to the direct labor hours required by each job during the month.

Job \#501 was shipped to the customer on May 2. The mark-up was \(20 \%\) based on cost. Job \#502 and Job \#503 were completed on May 20 and transferred to finished goods.
{Required:}
(1) Determine the sales price of Job \#501.
(2) Compute the work-in-process as of May 31.
(3) Determine the finished goods inventory as of May 31.
(4) Discuss any weakness existing in the company's overhead accounting system.

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The May 1 inventories consist of the following: Materials and supplies............. Work-in-process (Job #502) $4,000 400 Finished goods (Job # 501)................ 3,000 Information relating to the jobs worked during May is given below: Materials Used Direct Labor Incurred 30 hrs. @$10 $300 100 hrs. @$10-$1,000 Job #502 $ 500 #503 2,000 #504 1,000 70 hrs. @$10 $ 700 Other costs incurred during May: Factory repairs and maintenance.... $2,000 Factory heat, light, and power........... 3,000 Factory supplies......... Depreciation-factory equipment Total 1,000 2,000 $8,000