On January 31, 2016, the manufacturing facility of a medium-sized company was severely damaged by an accidental
Question:
1. Beginning inventories, January 1, 2016
Direct materials ......................... $32,000
Finished goods .......................... $30,000
Work in process .......................... $68,000
2. Key ratios for the month of January 2016:
Gross profit = 20% of sales
Prime costs = 70% of manufacturing costs
Factory overhead = 40% of conversion costs
Ending work in process is always 10% of the monthly manufacturing costs.
3. All costs are incurred evenly in the manufacturing process.
4. Actual operations data for the month of January 2016:
Sales ............................................ $900,000
Direct labour incurred ........................ $360,000
Direct materials purchases ................... $320,000
Instructions
(a) From the above data, reconstruct a cost of goods manufactured schedule.
(b) Calculate the total cost of inventory lost, and identify each category where possible (direct materials, work in process, and finished goods), at January 31, 2016.
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Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118856994
4th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
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