Question

Finley designs and manufactures displays used in mobile devices. Serious flooding throughout the region affected ​Finleys' facilities. Inventory was completely​ ruined, and the​ company's computer​ system, including all accounting​ records, was destroyed.

Before the disaster recovery specialists clean the​ buildings,

Heather Bailey​, the company​ controller, is anxious to salvage whatever records she can to support an insurance claim for the destroyed inventory. She is standing in what is left of the Accounting Department wtih Tad Myers​, the cost accountant. "I didn't know mud could smell so​ bad,"Tad says.​ "What should I be looking​ for?" ​"Don't worry about beginning inventory​ numbers," responds Heather. ​"We'll get them from last​ year's annual report. We need​ first-quarter cost​ data." "I was working on the​ first-quarter results just before the storm​ hit," Tad says.​ "Look, my​ report's still in my desk drawer. But all I can make out is that for the first​ quarter, material purchases were $524,000 and that direct​ labor, manufacturing overhead​ (other than indirect​ materials), and total manufacturing costs to account for were $545,000​; $218,000​; and $1,508,000​, respectively.​ Wait, and cost of goods available for sale was $1,615,000​." ​"Great," says Heather. ​"I remember that sales for the period were approximately $1.6 million. Given our gross profit of 15​%, ​that's all you should​ need." Tad is not sure about​ that, but decides to see what he can do with this information.

the beginning inventory numbers are as follows:

Raw​ materials, $85,000
•	Work in​ process, $187,000
•	Finished​ goods, $209,000

He remembers several schedules he learned in college that may help him get started.

Requirement

Determine the ending inventories of raw​ materials, work in​ process, and finished goods. Assume that Raw Materials Inventory contains only direct materials.

Start by determining the ending inventory of raw materials by calculating the direct materials used.

Finney Displays
Calculation of Direct Materials Used
For Current Year
Plus:
Less:

​Next, determine the ending inventory of work in process by calculating the cost of goods manufactured.

Finney Displays
Calculation of Cost of Goods Manufactured
For Current Year
Plus:
Less:

​Finally, determine the ending inventory of finished goods by calculating the cost of goods manufactured.

Finney Displays
Calculation of Cost of Goods Sold
For Current Year
Plus:
Less:

Answer 1