Question

Outdoor Furniture Company has inventory balances at the end of August as follows: Materials inventory $21,360 Work-in-Process inventory 15,112 Finished goods inventory 17,120 Job order cost cards for jobs in process at the company as of the end of September were as follows: Job Number Direct Materials Direct Labor Mfg Overhead 48A $1,596 $1,290 $1,677 48B $1,492 $1,380 $1,794 48C $1,984 $1,760 $2,288 48D $1,608 $1,540 $2,002 Materials purchased and received in September: September 4 $33,120 September 16 $28,600 September 22 $31,920 Direct labor costs for September: September 15 payroll $23,680 September 29 payroll $25,960 Predetermined overhead rate: 130% of direct labor costs Direct material transferred to production during September: September 6 $37,240 September 23 $38,960 Finished goods with a 75% markup over cost were sold during September for $230,000. a. Compute the cost of units completed during the month. b. What was the total cost of units sold during the month? c. What are ending inventory balances?

Answer 1

Raw Materials A/c
Beginning Inventory	21360	Transfer to WIP [37,240+38,960]	76200
Materials Purchased [33,120+28,600+31,920]	93640	Closing Inventory (Bal. fig.)	38800
Total	115000		115000
WIP A/C
Beginning Inventory	15112	Transfer to Finished Goods (Bal. Fig.)	185073
Transfer from Raw Materials	76200
Direct Labor [23,680+25,960]	49640
Overheads 49640*130%	64532	Ending Inventory [1,596+1,290+1,677+1,492+1,380 +1,794+1,984+1,760+2,288+1,608+1,540+2,002]	20411
	205484		205484
Finished Goods A/c
Beginning Inventory	17120	Cost of Goods Sold (230000* 100/175)	131429
Transfer from WIP	185073	Ending Inventory	70764
	202193		202193

a. Cost of units completed during the month = $185,073

b.  Total cost of units sold during the month = $131,429

c. Ending Inventory:

Raw Materials -    38800

Work in Progress- 20411

Finished Goods - 70764