Question

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

 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 $13,950 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	35000
Add: purchases of materials	160000
Total Raw materials Available	195000
Less: Ending Raw materials	45000
Cost of Raw materils used in Production	150000
Solution 2:
Indirect Materials
Cost of Raw materils used in Production	150000
Less: Direct materials used	110000
Indirect materials	40000
Solution 3:
Indirect labor cost
Factory Wages accrued (credits to Factory wages payable)	220000
Less: Direct Labor cost	210000
Indirect labor cost	10000
Solution 4:
Cost Of goods Manufactured
Cost Of goods Manufactured (Credit in WIP account)	530000
Solution 5:
Unadjusted Cost of goods sold
beginning Finished Goods inventory	60000
Add: Cost of goods manufactured	530000
Cost of goods available for sale	590000
Less: Ending Finished Goods inventory	90000
Unadjusted cost of goods sold	500000
Solution 6:
Predetermined Overhead rate
Overhead applied (from WIP account)	218400
/Direct labor	210000
Predetermined Overhead rate	104%
Solution 7:
Manufacturing Overhead under/overapplied
Overhead applied	218400
Actual Overhead (from manufacturing overhead)	188400
Overapplied overhead	30000
Solution 8:
Ending Balance in Work in process
Beginning balance in work in process	40000
Direct Materials	110000
Direct labor	210000
Overhead	218400
Less: Cost of goods manufactured	-530000
Ending Balance in Work in process	48400
Direct Materials and Applied overhead cost
Direct Labor Cost	13950
Predetermined Overhead rate	104%
Applied Overhead cost	14508
Direct Materials Cost (48400-13950-14508)	19942