Problem

The balances in the perpetual inventory accounts of Mountainside Manufacturing Corporation...

The balances in the perpetual inventory accounts of Mountainside Manufacturing Corporation at the beginning and end of the current year are as follows:

 

End

of Year

Beginning

of Year

Inventory accounts:

 

 

Materials 

 $30,000

 $25,000

Work in Process 

   10,000

     8,000

Finished Goods Inventory

   29,000

    30,000

Total dollar amounts debited and credited during the year to the accounts used in recording manufacturing activities are as follows:

 

Debit

Entries

Credit

Entries

Account:

 

 

Materials Inventory 

   $425,000

  $   ?

Direct Labor 

     200,000

210,000

Manufacturing Overhead 

     420,000

420,000

Work in Process Inventory 

        ?

     ?

Finished Goods Inventory 

       ?

    ?

Instructions

a. Using these data, state or compute for the year the following amounts:

1. Direct materials purchased.

2. Direct materials used.

3. Payments of direct labor payrolls.

4. Direct labor cost assigned to production.

5. The overhead assigned to production stated as a percentage of direct labor costs.

6. Total manufacturing costs charged to the Work in Process Inventory account during the year.

7. The cost of finished goods manufactured.

8. The cost of goods sold.

9. The total amount to be classified as inventory in the year-end balance sheet.


b. Prepare a schedule of the cost of finished goods manufactured.

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