Question

Road Warrior Corporation began operations early in the current year, building luxury motor homes. During the year, the company started and completed 50 motor homes at a cost of $60,000 per unit. Of these, 48 were sold for $95,000 each and two remain in finished goods inventory. In addition, the company had six partially completed units in its factory at year-end. Total costs for the year (summarized alphabetically) were as follows: $ 737000 Direct materials used Direct labor General and administrative 900,000 500,000 100,000 500,000 expenses Income tax expense Manufacturing overhead Selling expenses 1,520,000 Instructions a. Compute the total manufacturing costs charged to work in process for the current year: Total manufacturing costs

Answer 1

Direct Material Used Direct Labor Manufacturing Over heads Total Manufacturing cost 737000 900000 1520000 3157000 60000 50 Cost per Completed Home Number of Homes Completed Cost of finished Goods Manufactured (60000*50) 3000000 Cost Per completed home Number Of Homes Sold Cost of Goods Sold (60000 48) 2880000 60000 418 C

sales Revenue (95000*48) 4560000 2880000 1680000 D cost of Goods Sold Gross Profit Total Manufacturing Cost Less: Cost of Finished Goods Ending Inventory of working Proces Total cost of Finisehd goods Less: Cost of Goods Sold Ending Inventory of finished Goods 3157000 3000000 157000 3000000 2880000 120000