Question

Exam 2 Help Save & ExitSubmit Ryde and Rowe Inc. had the following account balances as of January 1 24 DISECE uterinzs Eacencr $ 8,700 76,500 53,000 Manufacturing overhead 15 points During the month of January. all of the following occurred. 8 1. Direct labor costs were $48,000 for 1,800 hours worked 2. Direct materials costing $30,000 and indirect materials costing $4,300 were purchased 3. Sales commissions of $17,000 were earned by the sales force. 4. $23,000 worth of direct materials were used in production. sing costs of $6,300 were incurred 6. Factory supervisors earned salaries of $12,253. 7. Indirect labor costs for the month were $3,000 8. Monthly depreciation on factory equipment was $4,500. 9. Utilities expense of $5.267 was incurred in the factory. 10. Equipment with manufacturing costs of $69,000 were transferred to finished goods. 11. Monthly insurance costs for the factory were $4,200 12. $5,000 in property taxes on the factory were incurred and paid. 13. Equipment with manufacturing costs of $94,805 were sold for $172,372 Required a. If Ryde and Rowe assigns manufacturing overhead of $34,400, what will be the balances in the Direct Materials, Work in Process and Finished Goods Inventory accounts at the end of January? b. As of January 31, what will be the balance in the Manufacturing Overhead account? c. What was Ryde and Rowe's operating income for January? Work in process inventory < Prev 24 of 24 Next >

Answer 1

SOLUTION

A. Inventories Account-

Particulars	Amount ($)
Direct materials inventory, Jan 1	8,700
Add: Direct materails purchased	30,000
Less: Direct materials used in production	(23,000)
Direct materials inventory, Jan 31	15,700
Work in progress inventory, Jan 1	76,500
Add: Direct materails used	23,000
Add: Direct labor used	48,000
Add: Manufacturing overhead	34,400
Less: Finished goods transferred out	(69,000)
Work in progress inventory, Jan 31	112,900
Finished goods inventory, Jan 1	53,000
Add: Goods transferred in	69,000
Less: Cost of goods sold	(94,805)
Finished goods inventory, Jan 31	27,195

B.

Particulars	Amount ($)
Manufacturing overhead, Jan 1	0
Add: Indirect materials purchased	4,300
Supervisor salaries	12,253
Indirect labor costs	3,000
Depreciation	4,500
Factory utilities	5,267
Factory insurance	4,200
Property taxes on factory	5,000
Less: Manufacturing overhead applied	(34,400)
Manufacturing overhead, Jan. 31	4,120

C. Operating Income for the month of January-

Particulars	Amount ($)	Amount ($)
Revenues		172,372
Less: Cost of goods sold		(94,805)
Gross profit		77,567
Less: Operating expenses:
Sales commission	17,000
Advertising expense	6,300	(23,300)
Operating income		54,267