Of all the times this hard drive could crash, it had to be now,” Marcy  cried. “How can I finish the June financial reports without all the information? I knew I should have backed up the disk last night before I left work.” News of the disaster traveled quickly through the office,  and people began to stop by her cubicle to offer their help.

 John was the first to the rescue. “It might not be as bad as you think, Marcy. I have the financial  reports from May right here. According to the balance sheet, we had a total inventory of $100,000 at the  end of May. And I remember that the Finished Goods Inventory was 60% of that amount.”

“I just finished the inventory counts last night,” Peter chimed in from across the hall. “According to  my tally sheets, we finished June with $38,000 in Direct Materials Inventory, $21,000 in Work in Process Inventory, and $45,000 in Finished Goods Inventory. This was a 25% increase from the balance in Direct  Materials Inventory at the end of May. I bet with a little more investigative work, we can get all the numbers you need to complete the reports.”

Sally called from Payroll to tell Marcy that the company had paid a total of $26,000 for direct labor  during June. Juan, the billing supervisor, e-mailed Marcy that the company had sent out invoices to customers totaling $291,000.

Marcy knew that the overhead rate was 200% of direct labor costs. She also knew that the company priced its product using a 100% markup on the cost of goods sold. Armed with all this information, she  sat down to reconstruct the inventory accounts for June.

Required

a. Using the information available to Marcy, prepare T-accounts to reflect the inventory cost flows for  June.

b. Prepare a schedule of cost of goods manufactured in good form.