Question

Selected T-accounts of Moore Company are given below for the just completed year: 7 Debits Manufacturing Overhead 189,500 Credits ? Bal. 1/1 Debits Bal. 12/31 Raw Materials 30,000 Credits 150,000 40,000 Work in Process 35,000 Credits 105,000 195,000 214,500 515,000 Debits Bal. 1/1 Direct materials Direct labor Overhead Bal. 12/31 Factory Wages Payable 215,000 Bal. 1/1 Credits Bal. 12/31 16,500 210,000 11,500 Finished Goods 55,000 Credits Cost of Goods Sold Bal. 1/1 Debits Bal. 12/31 82,500 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 $11,750 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost? Complete this question by entering your answers in the tabs below. Reg 1 to 5 Reg 6 Req 7 Reg 8 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?

Answer 1

Solution:

1.	Cost of raw materials	$140,000
2.	Indirect materials	$35,000
3.	Indirect labor cost	$15,000
4.	Cost of goods manufactured	$515,000
5.	Unadjusted cost of goods sold	$487,500

1.)

The cost of raw materials used in production was:

Beginning raw materials inventory	$30,000
Add: purchase of raw materials (debits)	$150,000
Total raw materials available	$180,000
Less: Ending raw materials inventory	$40,000
Raw materials used in production	$140,000

2.

Materials requisition for production	140,000
Work in process as direct materials (debts)	$105,000
Then, indirect materials	$35,000

* The difference of $35,000 was debited to manufacturing overhead as indirect materials.

3.

Total factory wages accured during the year :

Credit to the factory wages payable account	$210,000
Less: direct labor cost ( from work in process)	$195,000
Indirect labor cost	$15,000

4.)

The cost of goods manufactured was $515,000 __ the credits to the work in process account.

5.

The cost of goods sold for the Year was:

Beginning finished goods inventory	$55,000
Add: cost of goods manufactured (from work in process)	$515,000
Cost of goods available for sale	$570,000
Less: Ending finished goods inventory	$82,500
Cost of goods sold	$487,500

6.)

The predetermined overhead rate was:

Predetermined overhead rate = Estimated total manufacturing overhead costs / Estimated total amount of allocation bases

=$214,500 /$195,000 direct labor cost =110% of direct labor cost