Question

Question 2

Conrad, Inc. recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records.

Cost of Goods Sold	$	67,500
Work-in-Process Inventory, Beginning		11,500
Work-in-Process Inventory, Ending		9,500
Selling and Administrative Expense		16,250
Finished Goods Inventory, Ending		16,375
Finished Goods Inventory, Beginning		?
Direct Materials Used		?
Factory Overhead Applied		12,500
Operating Income		14,275
Direct Materials Inventory, Beginning		11,225
Direct Materials Inventory, Ending		6,175
Cost of Goods Manufactured		62,350

Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The CFO of Conrad, Inc. has asked you to recalculate the following accounts and to report to him by the end of the day.

What is the amount of direct materials purchased?

Multiple Choice

• $24,050.

• $29,100.

• $31,550.

• $36,550.

Stephenson Company's computer system recently crashed, erasing much of the company's financial data. The following accounting information was discovered soon afterwards on the CFO's back-up computer data.

Cost of Goods Sold	$	381,000
Work-in-Process Inventory, Beginning		30,250
Work-in-Process Inventory, Ending		40,300
Selling and Administrative Expense		50,450
Finished Goods Inventory, Ending		15,150
Finished Goods Inventory, Beginning		?
Direct Materials Purchased		172,100
Factory Overhead Applied		113,500
Operating Income		22,550
Direct Materials Inventory, Beginning		18,300
Direct Materials Inventory, Ending		6,050
Cost of Goods Manufactured		341,000
Direct Labor		55,750

The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end.

What should be the amount of direct materials available for use?

Multiple Choice

• $113,500.

• $184,350.

• $190,400.

• $205,550.

Answer 1

Schedule of Cost of Goods manufactured
Direct Materials
Raw Material, Beginning Inventory	$          11,225.00
Add: Purchases	$          24,050.00
Total Raw Material Available	$          35,275.00
Deduct : Raw Material in inventory, ending	$            6,175.00
Raw Material used in production		$       29,100.00
Direct Labor		$       18,750.00
Manufacturing Overhead applied to work In process	$       12,500.00
Total Manufacturing Costs		$       60,350.00
Add: Beginning Work in Process Inventory		$       11,500.00
		$       71,850.00
Deduct: Ending Work in Process Inventory		$          9,500.00
Cost of Goods Manufactured		$       62,350.00

Answer is a. $24050

Direct material available for use = $172100+18300 = $190400

Answer is c. $190400