Question

Selected T-accounts of Moore Company are given below for the just completed year: Manufacturing Overhead 230,000 Credits ? Debits 230,0 Bal. 1/1 Debits Bal. 12/31 Raw Materials 15,000 Credits 120,000 25,000 Work in Process 20,000 Credits 90,000 150,000 240,000 470,000 Debits Bal. 1/1 Direct materials Direct labor Overhead Bal. 12/31 Factory Wages Payable 185,000 Bal. 1/1 Credits | Bal. 12/31 9,000 180,000 4,000 Cost of Goods Sold Finished Goods 40,000 Credits ? Debits Bal. 1/1 Debits Bal. 12/31 60,000 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? Complete this question by entering your answers in the tabs below.

Answer 1

1) Cost of raw material used = 15000+120000-25000 = 110000

2) Indirect material = 110000-90000 = 20000

3) Indirect labor = 180000-150000 = 30000

4) Cost of goods manufactured = 470000

5) Unadjusted cost of goods sold = 40000+470000-60000 = 450000

6) Overhead rate = 240000/150000 = 160% of direct labor cost

7) Applied overhead = 240000

Actual overhead = 230000

Over applied overhead = 10000

8) Ending work in process = 500000-470000 = 30000

Direct labor = 8000

Overhead = 8000*1.6 = 12800

Direct material = 30000-20800 = 9200