Question

Manufacturing Cost Flows with Machine Hours Allocation On April 1, Telecom Manufacturing Company's beginning balances in manufacturing accounts and finished goods inventory were as follows: Raw Materials $35.000 Marutacturing Supplies 3.500 Work in Process 12.000 Manufacturing Overhead Finished Goods 50.000 During April, Telecom Manufacturing completed the following manufacturing transactions: 1. Purchased raw materials costing 560,000 and manufacturing supplies costing $2,000 on account. (Single Transaction) 2. Requisitioned raw materials costing $52,000 to the factory 3. Incurred direct labor costs of $18,000 and indirect labor costs of $6,500 4. Used manufacturing supplies costing 53,800 5. Recorded manufacturing depreciation of 511,000 6. Miscellaneous payables for manufacturing overhead totaled 58,500 7. Applied manufacturing overhead, based on 2,500 machine hours, at a predetermined rate of $10 per machine hour 8. Completed jobs costing 590,500 9. Finished goods costing $95.750 were sold (al Prepare "T" accounts showing the flow of costs through all manufacturing accounts, Finished Goods Inventory, and cost of Goods Sold. (b) Calculate the balances at the end of April for Work-in-Process inventory and Finished Goods Inventory Enter transactions in the Taccounts in the order they appear using the first available answer box on the appropriate side. Raw Materials inventory Work in Process inventory Finished Goods Inventory 35.000 Ba 12.000 50.000 0 O O

Answer 1

Solution:

1.)

Raw Materials Inventory
Beg. Bal.	$35000
1.) Purchase	$60,000
		$52,000	(b) Requisition
End. Bal.	$43,000

Manufacturing Supplies
Beg. Bal.	$3,500
1.) Purchase	$2,000
		$3,800	4.) Used
End. Bal.	$1,700

Work in Process Inventory
Beg. Bal.	$12,000
2.) Direct Materials	$52,000
3.) Direct labor	$18,000
7.) Applied MOH	$25,000 ($10 × 2,500 hours)
		$90,500	8.)Complete jobs
End. Bal.	$16,500

Manufacturing overhead:
Beg.Bal.	0
3.) Indirect Labor	$6,500
4.) Indirect Materials	$3,800
5.) Depreciation	$11,000
6.) Miscellaneous	$8,500
		$25,000	7.) Applied
End. Bal.	$4,800
		$4,800	Adjustment for under applied
Bal.	0

Finished Goods
Beg. Bal.	$50,000
8.) Completed	$90,500
		$95, 750	9.) Sold
End Bal	$44,750

Cost of Goods Sold
9.) Sold	$95,750
Adjustment for under applied MOH	$4,800
End. Bal	$100,550

b.)

Work in process inventory	$16,500
Finished goods	$44,750