On June 30, 2013, a flash flood damaged the warehouse and factory of Magna Corporation, completely destroying
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Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $123,000
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........0
Raw materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,100
The inventory on January 1, 2013, consisted of the following:
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . $109,000
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,000
Raw materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,300
....................................................................................................$261,300
A review of the books and records disclosed that the gross profit margin historically approximated 42% of sales. The sales for the first six months of 2013 were $584,000. Raw materials purchases were $88,000. Direct labor costs for this period were $130,000, and manufacturing overhead has historically been applied at 70% of direct labor.
Compute the value of the work-in-process inventory lost on June 30, 2013.
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