Question

$ Direct Materials Inventory Work in Process Inventory Finished Goods Inventory Manufacturing Overhead 8,700 76,500 53,000 During the month of January, all of the following occurred. 1. Direct labor costs were $49,000 for 1,800 hours worked. 2. Direct materials costing $28,000 and indirect materials costing $3,900 were purchased 3. Sales commissions of $16,000 were earned by the sales force. 4. $20,000 worth of direct materials were used in production. 5. Advertising costs of $6,300 were incurred. 6. Factory supervisors earned salaries of $12,535. 7. Indirect labor costs for the month were $3,000. 8. Monthly depreciation on factory equipment was $4,500. 9. Utilities expense of $7,265 was incurred in the factory. 10. Equipment with manufacturing costs of $69,000 were transferred to finished goods. 11. Monthly insurance costs for the factory were $4,200. 12. $5,000 in property taxes on the factory were incurred and paid. 13. Equipment with manufacturing costs of $89,183 were sold for $162,151. Required: a. If Ryde and Rowe assigns manufacturing overhead of $34,400, what will be the balances in the Direct Materials, Work in Process, and Finished Goods Inventory accounts at the end of January? b. As of January 31, what will be the balance in the Manufacturing Overhead account? c. What was Ryde and Rowe's operating income for January? 16,700 a. Direct materials inventory | $ Work in process inventory Finished goods inventory b. Manufacturing overhead c. Operating income

Answer 1

Ryde and Rowe Inc. Requirement a. Direct Materials Inventory, Jan 1 $8,700+ Direct Materials Purchased $28,000- Direct Materials in Production $20,000 = Direct Materials Inventory $ 16,700 %3D Work in Process in 1 Jan $76,500 + Direct Material Used $20,000 + Direct Labor Used $49,000 + Manufacturing Overhead Used $34,400 – Finish Goods Transferred $69,000 = Work in process inventory at the end of Jan. $110,900 Finished Goods Inventory $53,000- Goods Sold $89,183 = $32,817 Finished Goods Inventory at the end of January ost of finished goods transferred $69,000 - Cost of %3D Requirement b. Manufacturing Overhead $0 + Indirect Materials Purchased $3,900 + Supervisor Salary $12,535 + Indirect labor costs $3,000 +Depreciation $4,500 + Factory utilities $7,265 + Factory insurance $4,200 + Property taxes on factory $5,000 – Manufacturing overhead $34,400 = Manufacturing Overhead at the end of January $6,000 Requirement c. Operating income for January: Revenues $162,151- Cost of Goods Sold $ 89,183 = Gross Profit $72,968 %3D Operating expenses: Sales Commissions $16,000 + Advertising Expenses $ 6,300 = Total operating expenses $ 22,300 Gross Profit $72,968 - Total operating expenses $ 22,300 = $50,668