Question

Managerial Accounting 2302 Fall 2020 Chapter 3 Homework Assignment Highly recommend you do calculation exercises in EXCEL Selected T-accounts of Bobs Company are given below for the just completed year. Raw Materials Bal. 1/1 35,000 Credits Debits 160,000 Bal. 12/31 45,000 Manufacturing Overhead 188,400 Credits Debits 530,000 Bal, 1/1 Direct materials Direct labor Overhead Bal. 12/31 Work in Process 40,000 Credits 110,000 210,000 218,400 ? Debits Factory Wages Payable 225,000 Bal. 1/1 Credits Bal. 12/31 19.000 220.000 14,000 ? Bal. 1/1 Debits Bal. 12/31 Finished Goods 60,000 Credits ? 90,000 Cost of Goods Sold ?! Debits 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 answer. 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 $13,000 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?

Answer 1

Answer: to) Cost of Raw Materials used in production during the year calculated as follows: Beginning Raw material Inventory 35000 (+) Purchases during the year (-) Ending Rew material Inventory (45000) 160000 Cost of Raw Material used in Production 15000 2.) out of the raw materia $ 150000 used in production ; $ 110,000 was debited to direct material and the remaining $40000 was debited to overhead as indirect material.

3. ) Calculation of Indirect Labour cost are as follous- Total wages incurred 22000 (-) Direct Labour Cost from (210000) work in Process Alc Indirect Labour Cost $10.00 4.5 The amount Credited in work in process account is transferred to cost of Goods Manufactured Hence, the cost of Goods Manufactured for the year is $530,000.

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