On June 30, 2014, a tornado damaged Jensen Corporations warehouse and factory, completely destroying the work-in-process inventory.
Question:
Raw materials ... $ 87,000
Work-in-process ..... 0
Finished goods .. 151,000
$238,000
The inventory of January 1, 2014, consisted of the following:
Raw materials .. $ 41,000
Work-in-process . 128,000
Finished goods .. 173,000
$342,000
A review of the books and records disclosed that the gross profit margin historically approximated 28% of sales. The sales total for the first six months of 2014 was $405,000. Raw material purchases totaled $150,000. Direct labor costs for this period were $112,000, and manufacturing overhead has historically been applied at 50% of direct labor.
Required:
Compute the value of the work-in-process inventory lost at June 30, 2014. Show supporting computations.
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Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
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