Compute the Work-in-Process transferred to the finished goods warehouse on April 30 using the following information:...

Compute the Work-in-Process transferred to the finished goods warehouse on April 30 using the following information:


Work-In-Process Inventory, April 30	$	215
Direct material purchased during April		190
Work-In-Process Inventory, April 1		240
Direct labor costs incurred		340
Manufacturing overhead costs		290
Direct materials used in production		165

The following events took place at a manufacturing company for the current year:

(1) Purchased $100,000 in direct materials.
(2) Incurred labor costs as follows: (a) direct, $61,000 and (b) indirect, $18,600.
(3) Other manufacturing overhead was $112,000, excluding indirect labor.
(4) Transferred 80% of the materials to the manufacturing assembly line.
(5) Completed 65% of the Work-in-Process during the year.
(6) Sold 85% of the completed goods.
(7) There were no beginning inventories.

What is the company's Cost of Goods Sold?

The following are Margin Co.'s production costs for December:


Direct Materials	$	104,000
Direct Labor		94,000
Factory Overhead		8,000

What amount of costs should be traced to specific products in the production process? (CPA adapted)

Solutions

Expert Solution

1	Work-In-Process Inventory, April 1	$ 215
	Add: Direct materials used in production	$ 190
	Add: Direct labor costs incurred	$ 340
	Add: Manufacturing overhead costs	$ 290
	Less: Work-In-Process Inventory, April 30	$ 240
	Transferred to Finished Goods	$ 795

2	Calculation of Cost of Goods Sold
	Particulars	Amount
	Purchase of Direct Material	$ 100,000
	Direct Labor Cost	$ 61,000
	Indirect Labor Cost	$ 18,600
	Manufacturing Overhead	$ 112,000
	Total Cost Incurred	$ 291,600
	Less: Cost of Material Not Transferred (20% of $100,000)	$ 20,000
	Cost of WIP	$ 311,600
	Cost of Completed Goods(65% of WIP)	$ 202,540
	Cost of Goods Sold(85% of Completed Goods)	$ 172,159

3	Direct Materials	$ 104,000
	Direct Labor	$ 94,000
	Traceable Costs	$ 198,000

ekkarill92 answered 1 year ago

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