Question 7

Please answer the following questions relating to Ranjot and Himanshu company accounts (in thousands of dollars):

Raw Materials

Bal Beg.

100

Credits

?

Debits

900

Bal. End

----------156

Manufacturing Overhead

Debits

2202

Credits

?

Wages & Salaries Payable

Debits

1300

Bal Beg.

200

Credits

1206

--------

Bal End

106

Cost of Goods Sold

Debits

?

Work in Process

Bal Beg.

100

Credits

3506

Dir Mat

705

Dir Lab

1000

Overhead

BalEnd

2007

?

Finished Goods

Bal Beg.100

Credits ?

Debits?

---------

Bal End250

Required:

1. What was the cost of raw materials put into production during the year?
2. How much of the materials in part (1) consisted of indirect materials?
3. How much of the factory labour cost for the year consisted of indirect labour?
4. What was the cost of goods manufactured for the year?
5. What was the cost of goods sold for the year (before considering under- or overapplied overhead)?
6. If overhead is applied to production on the basis of direct labour cost, what rate was in effect during the year?
7. Was manufacturing overhead under- or over - applied? By how much?

Compute the ending balance in the work-in-process inventory account. Assume that this balance consists entirely of goods started during the year. If $75,600 of this balance is direct labour cost, how much of it is direct material cost? Manufacturing overhead cost?