On September 25, a disaster destroyed the work in process

On September 25, a disaster destroyed the work in process inventory for company “A”. At the time the company was in the process of manufacturing to custom jobs (B and Q); although all of the accounting records were destroyed there was some backups on an old site computer:

A company applies overhead at a rate of 85% of direct labor costs.

The cost of goods sold for the companies averages 75% of selling price. Selling for January 1, to the date of the disaster holds $1,598,000.

The company’s wage rate for production employees is $12.90 per hour. A total of 25,760 direct labor hours were recorded from January 1 through September 25.

As of September 25, $21,980 of direct material and hundred and 28 hours of direct labor had been recorded to job B ; $14,700 of direct materials and 240 hours of direct labor had been recorded to job Q.

January 1 inventories were as follows: $19,500 of raw material and $68,900 of finished goods.

Raw materials purchased during that year totaled $843,276.

The amount of work in process inventory at January 1 was $14,600 ; jobs B. and Q. we’re not in process on January 1.

One job, R was completed and in the warehouse awaiting shipment on September 25, the total cost of this job was $165,600.

Determine the following amounts:

1. Cost of goods sold for the year?

2. Cost of goods manufactured during the year?

3. Amounts of applied overhead for each job in work in process inventory?

4. Cost of work in process inventory destroyed by disaster?

5. Cost of raw material inventory destroyed by the disaster?


Members

  • Access to 2 Million+ Textbook solutions
  • Ask any question from 24/7 available
    Tutors
$9.99
VIEW SOLUTION

OR

Non-Members

Get help from Managerial Accounting Tutors
Ask questions directly from Qualified Online Managerial Accounting Tutors .
Best for online homework assistance.