Luke’s Lubricants starts business on January 1. The following operations data are available for January for...

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Luke’s Lubricants starts business on January 1. The following operations data are available for January for...

Luke’s Lubricants starts business on January 1. The following operations data are available for January for the one lubricant it produces:

	Gallons
Beginning inventory	0
Started in January	159,000
Ending work-in-process inventory (70% complete)	11,000

Costs incurred in January follow:


Materials	$	161,475
Labor		30,000
Manufacturing overhead		81,000

All production at Luke’s is sold as it is produced (there are no finished goods inventories).

Required:

a. Compute cost of goods sold for January. (Do not round intermediate calculations.)

b. What is the value of work-in-process inventory on January 31? (Do not round intermediate calculations.)

business accounting

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Answer 1

Answer #1

Cost of goods sold = 161,475 + 30,000 + 81000

= 272,475

Value of work in progress = (272,475 * 11,000 / 159,000)* 70%

= 1,3195.33

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Answer 2

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