Rock Shop Manufacturing Company makes specialty tools. In July, Rock Shop incurred manufacturing costs of $4,000,000...

Rock Shop Manufacturing Company makes specialty tools. In July, Rock Shop incurred manufacturing costs of $4,000,000 for direct materials, direct labour, and overhead. 30% of the total costs represents overhead applied. The overhead rate is $1 for every $0.50 of direct labour costs incurred. Inventory balances were:

July 1 / July 31
Raw materials $100,000 / $ 80,000
Work in process 90,000 / 95,000
Finished goods 120,000 / 130,000

Instructions
a) Determine the cost of raw materials purchased in July.
b) Prepare a cost of goods manufactured schedule for July 2016

Solutions

Expert Solution

Ending raw materials inventory	80,000.00
Direct materials used	2,200,000.00
	2,280,000.00
Beginning raw materials inventory	100,000.00
Raw materials purchases	2,180,000.00

Working Note-

Overhead Applied (4,000,000*30%)	1,200,000.00
Direct labor used (1,200,000*0.5)	600,000.00
Direct materials used	2,200,000.00

Rock Shop Manufacturing Company
Cost of Goods Manufactured Schedule
For the Month Ended July 31, 2016

Work in process, July 1		90,000.00
Direct materials used	2,200,000.00
Direct labor	600,000.00
Manufacturing overhead applied	1,200,000.00
Total manufacturing costs		4,000,000.00
Total cost of work in process		4,090,000.00
Work in process, July 31		95,000.00
Cost of goods manufactured		3,995,000.00

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Casual Shoe Company makes loafers. During the most recent year, Casual incurred total manufacturing costs of...

Casual Shoe Company makes loafers. During the most recent year, Casual incurred total manufacturing costs of $18,500,000. Of this amount, $2,800,000 was direct material used and $10,800,000 was direct labor. Beginning balances for the year were Direct Materials, $800,000; Work-in-process Inventory, $600,000; and Finished Goods Inventory, $700,000. At the end of the year, balances were direct materials, $700,000; Work-in-process inventory, $1,600,000; and Finished goods inventory, $590,000. Requirement 1. Analyze the inventory accounts to determine the cost of direct materials purchased...

The invoice price of a manufacturing machine is $1,600,000. The company incurred other costs relating to...

The invoice price of a manufacturing machine is $1,600,000. The company incurred other costs relating to the acquisition and installation of the machine (freight-in, wiring, labor for installation, etc.) that totaled $18,500. Management estimates that the machine has a 7-year life with no residual value. The chief executive officer, in a conversation with the chief financial officer, suggests that the incidental costs of $18,500 should be expensed immediately, and offered the following rationale: A. If the machine was sold, the...

Overhead Rates, Unit Costs Folsom Company manufactures specialty tools to customer order. There are three producing...

Overhead Rates, Unit Costs Folsom Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows: Welding Assembly Finishing Estimated overhead $220,000 $62,000 $150,000 Direct labor hours 4,500 10,000 6,000 Direct labor cost $90,000 $150,000 $120,000 Machine hours 5,000 1,000 2,000 Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, Janine, the controller, has been wondering whether...

Sterling Products Company uses a job- order costing system. The company incurred the following manufacturing costs...

Sterling Products Company uses a job- order costing system. The company incurred the following manufacturing costs during March: a. Purchased materials on credit,$58,800. b. Issued materials to production as follows: direct,$51,000; indirect,$111,300. c. Incurred factory wages,$59,400. d. Allocated factory wages to production as follows: direct,$45,000;indirect,$14,900. e. incurred factory overhead costs on account,$2,500. f. Recognized other factory overhead costs as follows: depreciation of equipment,$4,00; depreciation of building,$5,000;expired insurance,$600; accrued property taxes, $1,800. g. Applied factory overhead to production,$32,500. h. completed jobs...

Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2015:...

Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2015: Factory rent $ 37,700 Company advertising 24,000 Wages paid to seamstresses 76,400 Depreciation on salespersons' vehicles 32,000 Thread 1,040 Utilities for factory 24,200 Cutting room supervisor's salary 31,300 President’s salary 75,400 Premium quality cotton material 40,500 Buttons 830 Factory insurance 18,000 Depreciation on sewing machines 7,600 Wages paid to cutters 51,000 Required: 1. Compute the cost of direct materials for Cotton White. 2. Compute...

A manager is trying to estimate the manufacturing costs of a new product. The company makes...

A manager is trying to estimate the manufacturing costs of a new product. The company makes several other products that utilize some of the same manufacturing procedures as the new product. Which cost estimation method would be the best method to determine the total cost of manufacturing the new product? A. Engineering estimates. B. Regression analysis. C. Account analysis. D. Scattergraph.

Crowder Manufacturing Company manufactures and sells ceiling fans. Crowder incurred the following costs related to quality...

Crowder Manufacturing Company manufactures and sells ceiling fans. Crowder incurred the following costs related to quality for the year: Cost of warranty $35,000 Cost of employee quality training $27,000 Cost incurred to rework fans $18,000 Spoilage cost (net) $15,000 Cost of handling customer complaints $11,000 Depreciation cost of test equipment $ 6,000 Cost of quality circles $ 5,000 Maintenance cost of test equipment $ 3,000 Cost of retesting reworked fans $ 2,000 Cost of final testing of fans $ 1,000...

Baird Manufacturing Company makes a product that sells for $75 30 per unit Manufacturing costs for the product

Problem 11-23A (Algo) Absorption versus variable costing LO 11-4 Baird Manufacturing Company makes a product that sells for $75 30 per unit Manufacturing costs for the product amount to $26.00 per unit variable, and $74,520 feed. During the current accounting period, Baird made 3.600 units of the product and sold 3.200 units Selling and administrative expenses were zero." Required a. Prepare an absorption costing income statement. b. Prepare a variable costing income statement. Complete this question by entering...

a- A tax payer acquires an asset through manufacturing it and he incurred the following costs:...

a- A tax payer acquires an asset through manufacturing it and he incurred the following costs: direct material SR 100,000, direct labor SR 50,000 and manufacturing overhead SR 50,000. After 3 years the taxpayer disposed of that assets for SR250,000 cash Required: Compute the taxable gain or loss. b- A tax payer acquired a non-depreciable asset for SR 200,000 and he incurred subsequent expenses for SR 30,000 to alter and improve that asset, after 2 years the tax payer disposed...

Part I: Beverage Company makes two products, Hot and Cold. Annual joint processing costs incurred up...

Part I: Beverage Company makes two products, Hot and Cold. Annual joint processing costs incurred up to the split off point total $100,000. At the split-off point, Hot can be sold for $10 per unit and Cold can be sold for $15 per unit. Each product can be processed further; Hot would require additional costs of $5 per unit and could then be sold for $14 per unit. Cold could be sold for $25 per unit if additional costs of...

Subjects