Question

At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. Review the following data and fill in the missing amounts on the chart for Able Baker Charlie Company. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured.

Data for February
Decrease in materials inventory	$3,000
Materials inventory on Feb. 28	50% of materials inventory on Jan. 31
Direct materials purchased	$11,700
Direct materials used	3 times the direct labor incurred
Total manufacturing costs incurred in period	$28,700
Total manufacturing costs incurred in period	70% of Cost of Goods Manufactured
Total manufacturing costs incurred in period	$8,000 less than Cost of Goods Sold

Account	Account Balances		Costs Incurred
	Jan. 31	Feb. 28
Materials Inventory			Direct Materials Used
Work in Process Inventory	$21,000		Direct Labor Incurred
Finished Goods Inventory		$15,500	Factory Overhead Incurred
			Cost of Goods Sold

Answer 1

ans
Account	31-Jan	28-Feb
Materials Inventory	6000	3000
Work in process inventory	21,000	8700
Finshed goods Inventory	23500	15,500

Cost Incurred
Direct Materials Used	14700
Direct Labor Incurred	4900
Factory Overhead Incurred	21400
Factory Overhead Incrred	21400
Cots of goods Sold	49000

Working Note:-

Let Cost of goods manufactured be x
TMC=70%*X
28700=70%*X
Cost of good manufactured	41000
(28700/.7)
Work iN Process , Jan 31	21000
Add: Total manufacturig cost	28700
	49700
Work iN Process , Feb 28 ($49700-41000)	8700
Cost of good manufactured	41000
Cost of Good sold
Finsihed Goods Inventory, Jan 31 (64500-41000)	23500
Cost of good manufactured	41000
Cost of good available for sale (49000+15500)	64500
Less: Finsished Goods Inventory, Feb 28	15500
Cost of Good sold (41000+8000)	49000
Opening Material inventory be I
ending Material inventory be .5i
i-.5i=3000
i=3000/.5	6000
Material Inventory, Jan 31	6000
Add: Purchases	11700
Material available	17700
Less: ending inevntory (6000*.5)	3000
Direct material used( $17700-14700)	14700
Direct labor 14700/3	4900
Factory overhead (41000-14700-4900)	21400