Base your answer on the following data from Ryder Furniture Corporation for Octo
ID: 1188181 • Letter: B
Question
Base your answer on the following data from Ryder Furniture Corporation for October.
Ryder Furniture Corporation for October
Quantity
Work in Process - Beginning
- 0 -
Started in Production - Current Month
3,500
Transferred Out to Next Department
3,200
By-Product Removed
300
Work in Process - Ending
- 0 -
Common Costs
Materials
$59,850
Labor
15,400
Overhead
11,200
Total
$86,450
Additional Processing of By-Product
Materials
$ 3,630
Labor
1,905
Overhead
1,275
Total
$ 6,810
Other Data
Sales Price of By-Product
$40.00 per unit
Selling and Administrative Costs
10 percent of sales
Normal Net Profit
5 percent of sales
What is the total estimated manufacturing cost of the by-product using the reversal cost method?
What is the estimated manufacturing cost before separation, using the reversal cost method?
Ryder Furniture Corporation for October
Quantity
Work in Process - Beginning
- 0 -
Started in Production - Current Month
3,500
Transferred Out to Next Department
3,200
By-Product Removed
300
Work in Process - Ending
- 0 -
Common Costs
Materials
$59,850
Labor
15,400
Overhead
11,200
Total
$86,450
Additional Processing of By-Product
Materials
$ 3,630
Labor
1,905
Overhead
1,275
Total
$ 6,810
Other Data
Sales Price of By-Product
$40.00 per unit
Selling and Administrative Costs
10 percent of sales
Normal Net Profit
5 percent of sales
Explanation / Answer
The basic equation for calculating product cost is as follows (using the example of the manufacturer given in the figure below): $91,200,000 total manufacturing costs
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