Question

(0.3) Ron Williams recently took over as the controller of Johnson Brothers Manufacturing. Last month, the previous controller left the company with little notice and left the accounting records in disarray Ron needs the ending inventory balances to report first quarter numbers. For the previous month (March 2011) Ron was able to piece together the following information: Direct materials purchased Work-in-process inventory, 3/1/2011 Direct materials inventory, 3/1/2011 Finished goods inventory, 3/1/2011 Conversion Costs Total manufacturing costs added during the period $ 840,000 Cost of goods manufactured Gross margin as a percentage of revenues Revenues $240,000 $70,000 $25,000 $320,000 $60,000 4 times direct materials used 20% $1,037,500 1. Compute the following Direct materials used= Cost of goods manufactured 2. Complete the following table (schedule) and find A: Finished goods inventory, 3/31/2011 B: Work-in-process inventory, 3/31/2011 C: Direct materials inventory, 3/31/2011 Direct materials, 3/1/2011 Direct materials purchased Direct materials available for use Direct materials, 3/31/2011 Direct materials used Conversion costs Manufacturing costs added during the period Add work in process, 3/1/2011 Manufacturing costs to account for Deduct work in process, 3/31/2011 B- Cost of goods manufactured Add finished goods, 3/1/2011 Cost of goods available for sale Deduct finished goods, 3/31/2011 Cost of goods sold

Answer 1

Answer is given below with all working

1 Direct material used $180,000 Cost of Goods Manufactured $720,000 A: Finished Goods Inventory ,3/31/2011 B: Work-in-process Inventory, 3/31/2011 C: Direct Materials Inventory, 3/31/2011 $210,000 $190,000 $85,000 Direct Material 3/1/2011 Direct Material purchased Direct Material available for use Direct Material 3/31/2011 Direct Material used Conversion cost Manufacturing cost added during the period Add: Work in process 3/1/2011 Manufacturing costs to account for Deduct Work in process 3/31/2011 Cost of Goods manufactured Add: Finished goods 3/1/2011 Cost of Goods available for sale Deduct Finished Goods 3/31/2011 Cost of Goods Sold $25,000 $240,000 $265,000 $85,000 C $180,000 $660,000 $840,000 $70,000 $910,000 $190,000 B $720,000 $320,000 $1,040,000 $210,000 $830,000 Working note Cost of Goods manufactured Cost of Goods sold Add: Closing Finished Goods Cost of Goods available Less: Opening Finished Goods Cost of Goods manufactured $830,000 $210,000 $1,040,000 $320,000 $720,000 Revenues Gross Margin 20% Cost of Goods Sold $1,037,500 $207,500 $830,000