Question

Last night, the sprinkler system at Plant A was accidentally set off. The ensuing deluge destroyed most of the cost records in Plant A for the month just completed (May). The plant manager has come to you in a panic—he has to complete his report for head office by the end of today. He wants you to give him the numbers he needs for his report. He can provide you with some fragments of information he has been able to salvage: Raw materials: Beginning $24,000 Ending 56,400 Work in process: Beginning 17,200 Finished goods: Sold in May 401,200 Ending 54,800 Manufacturing overhead: Beginning 0 Accrued wages payable: Beginning 11,600 Ending 18,100 Other information: 1. Total direct materials requisitions for the month were $180,400. 2. A total of 9,000 direct labour hours were worked during the month at an average wage of $15/hour. 3. Manufacturing overhead of $100,000 was incurred during the period. 4. On May 31, the ending inventory of work in process is $5,300. Calculate the following:

1. The material purchased during May. Material purchased ( )$

2. The amount paid to the labour force in May. Amount paid to the labour force ( )$

3. The cost of goods transferred from work in process inventory to finished goods inventory in May. Cost of goods transferred from work in process inventory to finished goods inventory ( )$

4. The cost of finished goods inventory at the beginning of May. Cost of finished goods inventory ( )$

Answer 1

Req 1.
Ending balance of raw material		56400
Add: Requisitions			180400
Total				236800
Less: Beginning balance of raw material	24000
Purchased			212800
Req 2.
Direct labor cost incurred (9000 DLH @15)	135000
Add: Beginning balance of Accrued wages	11600
Less: Ending balance of Accrued wages	-18100
Direct labor cost paid		128500
Req 3.
Beginning balance of WIP		17200
Add: Current cost incurred
Material requisitioned	180400
Direct labor cost incurred	135000
Manufacturing Oh		100000	415400
Total cost of goods manufacturing	432600
Less: Ending balance of WIP		5300
Cost of goods manufactured		427300
Req 4.
Ending inventory of FG		54800
Add: Cost of goods sold		401200
Total				456000
Less: Cost of goods manufactured	427300
Beginning inventory of FG		28700