Avanti uses the perpetual inventory system to record its operation and a normal costing system that applies
Question:
Avanti uses the perpetual inventory system to record its operation and a normal costing system that applies manufacturing overhead at the rate of 120% of direct labor charges. The initial inventory of materials is $ 18.00 pesos, while at the end it had a balance of $ 3,090 pesos. Purchases for the period were for $ 2,700 pesos. The balance of the inventory account of products in process, as of April 1, 20XX, consisted of the following analysis of orders.
ordenes | Direct Materials | Direct labor | Indirect costs | Total |
A-71 | $530 | $340 | $408 | $1,278 |
A-72 | $230 | $300 | $360 | $890 |
Total | $760 | $640 | $768 | $2,168 |
During April they began to prepare orders B-81 and B-82. A summary of the material requisitions and time slips revealed the following costs for different orders.
Materials request | ||
Folio | Orden | Cost of materials |
101 | A-71 | $200 |
102 | B-81 | $350 |
103 | A-72 | $500 |
104 | B-82 | $360 |
Total |
| $1,460 |
Time Tickets | ||
Folio | Orden | workforce cost |
201 | A-71 | $650 |
202 | B-81 | $480 |
203 | A-72 | $390 |
204 | B-82 | $470 |
Total |
| $1,990 |
On November 30, orders B-81 and B-82 had not yet finished. Only the A-72 was delivered to the customers, since they only settled the amount of the invoice and it is the company's policy not to deliver the finished product until the moment of full payment. The actual indirect costs for the month amounted to $ 1,500 pesos.
a) Calculate the cost of the finished items
b) Determine the inventory of products in process and that of finished products as of April 30
c) Calculate the total resources invested in order A-71
d) Determine the under or over application and adjust it proportionally between the orders processed in April.
Horngrens Accounting
ISBN: 978-0133855371
10th Canadian edition Volume 1
Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo-Ann L. Johnston, Peter R. Norwood