Question
In: Accounting
Towson Manufacturing had a Work in Process balance of $70,000 on January 1, 2018. The year...
Towson Manufacturing had a Work in Process balance of $70,000 on January 1, 2018. The year end balance of Work in Process was $108,000 and the Cost of Goods Manufactured was $800,000. Use this information to determine the total manufacturing costs incurred during the fiscal year 2018. (Round enter as whole dollars only.)
Solutions
Expert Solution
We are given the following:
Work-in-process balance on January 1, 2018 $70,000
Work-in-process balance on December 31, 2018 $108,000
Cost of goods manufactured $800,000
Format for cost of production is as follows:
Opening balance of raw materials XXXX
Add: Purchases XXXX
---------
XXXX
Add: Carriage inwards XXXX
--------
Raw materials available for production XXXX
Less: Closing balance of raw materials (XXXX)
---------
Cost of raw materials consumed XXXX
Add: Direct Labor XXXX
Add: Direct factory expenses XXXX
----------
Gross manufacturing cost XXXX
Add: Opening stock of work-in-process XXXX
----------
XXXX
Less: Closing stock of work-in-process (XXXX)
---------
Cost of production/goods manufactured XXXX
=====
Therefore, Gross factory cost = Cost of production + Closing stock of work-in-process - Opening stock of work-in- process
Substituting the values given, we proceed as follows:
Total manufacturing cost = $800,000 + $108,000 - $70,000
= $838,000
Thus, Towson Manufacturing incurred a total manufacturing costs of $838,000 for the fiscal year 2018.
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cash dividends of $15,000. Baltimore Company intended this
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significant influence as the purchase represents a 40% ownership
stake in Towson Company. On August 1, 2018, Towson Company paid
cash dividends of $19,000. Baltimore Company intended this
investment to a long-term investment. On December 31, 2018, Towson
Company reported $50,000 of net income for FY 2018. Additionally,
the current market price for Towson Company's stock increased to
$26...
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