Question

Selected T-accounts of Moore Company are given below for the just completed year:

Raw Materials
Bal. 1/1	15,000	Credits	?
Debits	120,000
Bal. 12/31	25,000

Manufacturing Overhead
Debits	230,000	Credits	?

Work in Process
Bal. 1/1	20,000	Credits	470,000
Direct materials	90,000
Direct labor	150,000
Overhead	240,000
Bal. 12/31	?

Factory Wages Payable
Debits	185,000	Bal. 1/1	9,000
		Credits	180,000
		Bal. 12/31	4,000

Finished Goods
Bal. 1/1	40,000	Credits	?
Debits	?
Bal. 12/31	60,000

Cost of Goods Sold
Debits	?

Required:

1. What was the cost of raw materials used in production during the year?

2. How much of the materials in (1) above consisted of indirect materials?

3. How much of the factory labor cost for the year consisted of indirect labor?

4. What was the cost of goods manufactured for the year?

5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied overhead in your answer.

6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year?

7. Was manufacturing overhead underapplied or overapplied? By how much?

8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If $8,000 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?

Answer 1

Solution 1:
Cost of Raw materils used in Production
Beginning raw Materials	15000
Add: purchases of materials	120000
Total Raw materials Available	135000
Less: Ending Raw materials	25000
Cost of Raw materils used in Production	110000
Solution 2:
Indirect Materials
Cost of Raw materils used in Production	110000
Less: Direct materials used	90000
Indirect materials	20000
Solution 3:
Indirect labor cost
Factory Wages accrued (credits to Factory wages payable)	180000
Less: Direct Labor cost	150000
Indirect labor cost	30000
Solution 4:
Cost Of goods Manufactured
Cost Of goods Manufactured (Credit in WIP account)	470000
Solution 5:
Unadjusted Cost of goods sold
beginning Finished Goods inventory	40000
Add: Cost of goods manufactured	470000
Cost of goods available for sale	510000
Less: Ending Finished Goods inventory	60000
Unadjusted cost of goods sold	450000
Solution 6:
Predetermined Overhead rate
Overhead applied (from WIP account)	240000
/Direct labor	150000
Predetermined Overhead rate	160%
Solution 7:
Manufacturing Overhead under/overapplied
Overhead applied	240000
Actual Overhead (from manufacturing overhead)	230000
Overapplied overhead	10000
Solution 8:
Ending Balance in Work in process
Beginning balance in work in process	20000
Direct Materials	90000
Direct labor	150000
Overhead	240000
Less: Cost of goods manufactured	-470000
Ending Balance in Work in process	30000
Direct Materials and Applied overhead cost
Direct Labor Cost	8000
Predetermined Overhead rate	160%
Applied Overhead cost	12800
Direct Materials Cost (30000-8000-12800)	9200