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PROBLEM 3-11 T-Account Analysis of Cost Flows LO3-2, LO3-3, LO3-4 Selected T-accounts of Moore Company are given below for th
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According to the requirement of the question, we have to fill the blanks of Ledger.

Requirement 1:- What was the Cost of Raw Materials used in production during the year?

Solution:- $110,000

Beginning Raw Material inventory $15,000
Add: Purchases of materials (Debits) $120,000
Total raw materials available $135,000
Less: Ending raw material inventory $(25,000)
Raw Materials used in production $110,000

Requirement 2:- How much of the materials in (1) above consisted of indirect materials?

Solution:- Out of the $110,000 materials used for production. $90,000 was debited to Work in Process as Direct Materials.

Therefore, the difference of $20,000 ($110,000 - $90,000) was Debited to Manufacturing Overhead as Indirect Materials.

Requirement 3:- How much of the factory labor cost for the year consisted of indirect labor?

Solution:- $30,000

Total factory wages (Credits) $180,000
Less:- Direct Labor cost (from Work in Process) $(150,000)
Factory (Indirect) labor cost   $30,000

Requirement 4:- What was the cost of Goods Manufactured for the year?

Solution:- The Cost of Goods Manufactured was $470,000 (Credits to the Work in Process Account)

Requirement 5:- What was the Unadjusted cost of Goods Sold for the year? Do not include any under applied or over applied overhead in your answer.

Solution:- $450,000

Beginning Finished Goods inventory $40,000
Add: Cost of Goods Manufactured (from Work in Process) $470,000
Cost of Goods available for sale $510,000
Less: Ending Finished goods inventory (Given) $(60,000)
Cost of Goods Sold $450,000

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

Solution:- The predetermined overhead rate was:-

Predetermined Overhead Rate = Estimated Total manufacturing Overhead Cost / Estimated Total amount of the allocation

Predetermined Overhead Rate = $240,000 / $150,000 (direct labor cost)

Predetermined Overhead Rate = 160% of direct labor cost

Requirement 7:- Was manufacturing overhead under applied or over applied? By how much?

Solution:- Over Applied Overhead was $(10,000)

Actual Manufacturing Overhead Cost (Debits Manufacturing Overhead) $230,000
Manufacturing Overhead Applied (Debits to Work in Process) $240,000
Over Applied Overhead $(10,000)

Requirement 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 his balance is direct labor cost, how much of it is direct materials cost? Applied overhead Cost?

Solution:- The Ending Balance in Work in Process is $30,000 ($500,000 - $470,000). Direct Labor makes up $9,200 of this balance, and overhead applied makes up $12,800.

Ending Balance, Work in Process $30,000
Less: Direct material Cost (given) $(8,000)
Less: Manufacturing Overhead cost ($8,000 * 160%) $(12,800)
Direct Labor Cost (Balance) $9,200

Ledger Accounts

Raw Materials

Balance 1/1 $15,000 Credits $110,000
Debits $120,000
Balance 12/31 $25,000

Work in Process

Balance 1/1 $20,000 Credits 470,000
Direct Materials $90,000
Direct Labor $150,000
Overhead $240,000
Balance 12/31 $30,000

Factory Wages Payable

Debits $185,000 Balance 1/1 $9,000
Credits $180,000
Balance 12/31 $4,000

Finished Goods

Balance 1/1 $40,000 Credits $450,000
Debits $470,000
Balance 12/31 $60,000

Cost of Goods Sold

Debits $450,000      

Thank you....

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