Rexford Company manafactures finger splints for kids who get tendonitis from pla

Question

Rexford Company manafactures finger splints for kids who get tendonitis from playing video games. The firm had the following inventories at the beginning and end of the month of January.

Jan 1 Jan 31

Finished goods……………..$162,500 $152,100
Work in process…………….305,500 326,300
Raw material………………..174,200 161,200

The following additional manufacturing data pertains to January operations.

Raw material purchased………………$248,300
Direct labor……………………………390,000
Actual manufacturing overhead……….227,500
Actual selling and admistrative expenses.230,000

Rexford Company applies manufacturing overhead at the rate of 70 percent of direct-labor cost. Any overapplied or underapplied manufacturing overhead is accumulated untile the end of the year.

Required: Compute the following amounts
1. The company’s prime cost for January
2. The total manufacturing cost for January

3. The cost of goods nmanufactured for January
4. The cost of goods sold for January
5. The balane in the Manufacturing Overhead account on January 31. Debit or credit?

Explanation / Answer

Statement of cost of gods manufactured

Statement of cost of gods manufactured

Beginning works in process inventory 305,500 Direct materials: Beginning materials inventory $174,200 Purchases 248,300 Cost of material available for use $422,500 Less ending material inventory 161,200 Cost of direct material used $261,300 Direct labor 390,000 Factory overhead 227,500 Total manufacturing cost incurred 878,800 Total manufacturing costs 1,184,300 Less ending works in process inventory       326,300 Cost of goods manufactured 858,000

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