Question

Ideal Displays designs and manufactures displays used in mobile devices. Serious flooding throughout the region affected Ideal Displays' facilities. Inventory was completely ruined, and the company's computer system, including all accounting records, was destroyed. (Click the icon to view additional information.) The beginning inventory numbers are as follows: PE (Click the icon to view beginning inventory numbers.) Requirement Determine the ending inventories of raw materials, work in process, and finished goods. Assume that Raw Materials Inventory contains only direct materials. Ending raw materials inventory

Answer 1

Cost of goods sold	Sales*(1-Gross profit)
Cost of goods sold	1600000*(1-0.25)
Cost of goods sold	$1,200,000
Cost of goods sold	Cost of goods available for sale - Ending finished goods inventory
1200000	1415000-Ending finished goods inventory
Ending finished goods inventory	1415000-1200000
Ending finished goods inventory	$215,000
Calculation of ending raw material inventory and work in process inventory
Beginning work in process inventory		$194,000
Direct materials
Beginning raw material inventory	$103,000
Add: Purchases of raw material	$530,000
Total raw material available	$633,000
Less: Raw material inventory, ending	$67,000		633000-566000
Raw material used in production	$566,000		(1329000-545000-218000)
Direct labor	$545,000
Manufacturing overhead	$218,000
Total manufacturing costs		$1,329,000	(1523000-194000)
Total manufacturing costs to account for		$1,523,000
Less: Ending work in process inventory		$260,000	(1523000-1263000)
Cost of goods manufactured		$1,263,000	(1415000-152000)
Ending inventory
Raw material	$67,000
Work in process	$260,000
Finished goods	$215,000