Question

Selected T-accounts of Moore Company are given below for the just completed year: Manufacturing Overhead 203,200 Credits ? Debits ? Bal. 1/1 Debits Bal. 12/31 Raw Materials 25,000 Credits 140,000 35,000 Work in Process 30,000 Credits 100,000 180,000 223,200 500,000 Debits Bal. 1/1 Direct materials Direct labor Overhead Bal. 12/31 Factory Wages Payable 205,000 Bal. 1/1 Credits Bal. 12/31 14,000 200,000 9,000 Cost of Goods Sold Finished Goods 50,000 Credits ? Debits Bal. 1/1 Debits Bal. 12/31 75,000 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 answe 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 $10.500 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

LUE Answer Part 1) Cost of Raw Material Used In Production = Beginning inventory + purchases - ending inventory = 25000+140000-35000 = $ 130000 Thus the correct answer is $ 130000 Part 2) Indirect material = total material used - direct material = 130000 - 100000 = $ 30000 2 3 5 Thus the correct answer is $ 30000 - Part 3) 3 Indirect Labour = Total wages incurred - direct labour = 200000-180000 = $ 20000 2 Thus the correct answer is $ 20000

= Part 4) Cost of goods manufactured for the year = credit side of work in process account = $ 500000 Thus the correct answer is $ 500000 - Part 5) Unadjusted cost of goods sold = beginning finished goods + cost of goods manufactured - ending finished goods - = 50000+500000-75000 = = $475000 Thus the correct answer is $ 475000 - Part 6) Overhead rate = overheads applied / direct labour cost = 223200/180000*100 = 124 % Thus the correct aswer is 124%

E F M 4 А в 4 Part 7) -5 Manufacturing overheads are overapplied -6 = applied overheads - actual overheads -7 = 223200-203200 8 = $20000 0 The correct answer manufacturing overheads overapplied by $ 20000 2 Part 8) 3 Ending work in process = beginning balance of wip + direct material + direct labour + manufacturing overheads - cost of goods manufactured 4 = 30000+100000+180000+223200-500000 -5 = $ 33200 -7 Applied overheads = direct labour *124% 8 = 10500*124% 9 = $ 13020 -1 Direct Material = ending wip - direct labour-overheads -2 = 33200-10500-13020 3 = $ 9680 -5 Thus the final answer is -6 ending balance in work in process = $ 33200 -7 Direct Material cost = $ 9680 -8 Applied overheads = $ 13020