In: Accounting
The Falcon Company does not maintain backup documents for its computer files. In June, some of the current data were lost, and you have been asked to help reconstruct the data. The following beginning balances on June 1 are known:
Direct Materials Inventory | $ | 13,100 | ||
Work-in-Process Inventory | 5,600 | |||
Finished Goods Inventory | 14,100 | |||
Manufacturing Overhead Control | 27,500 | |||
Accounts Payable | 7,100 | |||
Reviewing old documents and interviewing selected employees have
generated the following additional information:
The production superintendent's job cost sheets indicated that
materials of $3,700 were included in the June 30 Work-in-Process
Inventory. Also, 410 direct labor-hours had been paid at $7.00 per
hour for the jobs in process on June 30.
The Accounts Payable account is only for direct material purchases.
The clerk remembers clearly that the balance in the Accounts
Payable on June 30 was $9,100. An analysis of canceled checks
indicated payments of $51,000 were made to suppliers during
June.
Payroll records indicate that 6,300 direct labor-hours were
recorded for June. It was verified that there were
no variations in pay rates among employees during
June.
Records at the warehouse indicate that the Finished Goods Inventory
totaled $18,200 on June 30.
Another record kept manually indicates that the Cost of Goods Sold
in June totaled $95,000.
The predetermined overhead rate was based on an estimated 71,000
direct labor-hours for the year and an estimated $355,000 in
manufacturing overhead costs.
What is the amount of direct materials purchased during June?
$49,000.
$51,000.
$53,000.
$56,000.
A |
Accounts Payable balance on June 30 |
$ 9,100.00 |
B |
Cash payment made to suppliers during June |
$ 51,000.00 |
C |
Accounts Payable balance on June 1 |
$ 7,100.00 |
D = A+B - C |
Amount of Direct Material Purchased |
$ 53,000.00 |
Correct Answer |
Option #3: $ 53,000 |