Question
In: Accounting
The following information comes from the accounting records for Chelsea, Inc., for May: Direct materials...
The following information comes from the accounting records for Chelsea, Inc., for May:
| Direct materials inventory, May 1 | $ | 17,000 |
| Direct materials inventory, May 31 | 15,200 | |
| Work-in-process inventory, May 1 | 9,500 | |
| Work-in-process inventory, May 31 | 5,300 | |
| Finished goods inventory, May 1 | 54,500 | |
| Finished goods inventory, May 31 | 72,100 | |
| Direct materials purchased during May | 83,800 | |
| Direct labor costs, May | 59,300 | |
| Manufacturing overhead, May | 79,700 | |
Required:
a. Compute the total prime costs for the month of May.
b. Compute the total conversion costs for the month of May.
c. Compute the total manufacturing costs for the month of May.
d. Compute the cost of goods manufactured for the month of May.
e. Compute the cost of goods sold for the month of May.
Solutions
Expert Solution
a. Total prime costs for the month of May = $85,600 + $59,300 = $ 144,900
Prime Costs = Direct Material + Direct Labor
Direct Material = Direct materials inventory, May 1 + Direct materials purchased during May - Direct materials inventory, May 31 = $17,000 + $83,800 - $15,200 = $85,600.
b. Total conversion costs for the moth of May = $59,300 + $79,700 = $ 139,000
Conversion costs = Direct labor costs + Manufacturing overhead costs
c. Total manufacturing costs for the month of May = $85,600 + $59,300 + $79,700 = $ 224,600
Total manufacturing costs = Direct materials used + Direct labor costs + Manufacturing overhead costs
d. Cost of goods manufactured for the month of May = $9,500 + $224,600 - $5,300 = $ 228,800
Cost of goods manufactured = Work-in-process inventory, May 1 + Total manufacturing costs - Work-in-process inventory, May 31
e. Cost of goods sold for the month of May = $54,500 + $228,800 - $72,100 = $ 211,200
Cost of goods sold = Finished goods inventory, May 1 + Cost of goods manufactured - Finished goods inventory, May 31
ekkarill92 answered 1 year agoRelated Solutions
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The following information was obtained from the accounting records and financial statements of Kenai Inc. Assets...
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Accounts receivable
345,000
498,000
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250,000
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The following information concerns production in the Baking
Department for May. All direct materials are placed in process at
the beginning of production.
ACCOUNT Work in Process—Baking
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ACCOUNT NO.
Date
Item
Debit
Credit
Balance
Debit
Credit
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1
Bal., 4,200 units, 4/5 completed
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Department for May. All direct materials are placed in process at
the beginning of production.
ACCOUNT
Work in Process—Baking Department
ACCOUNT
NO.
Date
Item
Debit
Credit
Balance
Debit
Credit
May.
1
Bal., 5,400 units, 3/5
completed
10,746
31
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166,266
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Direct labor
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210,406
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Work in Process—Baking Department
ACCOUNT
NO.
Date
Item
Debit
Credit
Balance
Debit
Credit
May.
1
Bal., 5,700 units, 4/5
completed
4,104
31
Direct materials, 102,600
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184,680
188,784
31
Direct labor
52,250
241,034
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Factory overhead
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270,432
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Goods finished, 104,100 units
260,856
9,576
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The following information concerns production in the Baking Department for May. All direct materials are placed...
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Department for May. All direct materials are placed in process at
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ACCOUNT Work in Process—Baking
Department
ACCOUNT NO.
Date
Item
Debit
Credit
Balance
Debit
Credit
May.
1
Bal., 7,200 units, 1/3 completed
12,360
31
Direct materials, 129,600 units
194,400
206,760
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Direct labor
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266,490
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Factory overhead
33,594
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288,960
11,124
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