The following information is from the finanial records of Company ExCost for the

Question

The following information is from the finanial records of Company ExCost for the year: Total Manufacturing Costs $           2,150,000 Cost of Goods Manufactured $           2,075,000 Applied Factory Overhead was 25% of total manufacturing costs Factory Overhead was applied at a rate of 80% of direct labor costs Work-in-Process Inventory on January 1 was 75% of Work-in-Process Inventory on Dec 31 What is the carrying value of Work-in-Process Inventories on December 31: What is the total Direct Material Costs for the Year: The following information is from the finanial records of Company ExCost for the year: Total Manufacturing Costs $           2,150,000 Cost of Goods Manufactured $           2,075,000 Applied Factory Overhead was 25% of total manufacturing costs Factory Overhead was applied at a rate of 80% of direct labor costs Work-in-Process Inventory on January 1 was 75% of Work-in-Process Inventory on Dec 31 What is the carrying value of Work-in-Process Inventories on December 31: What is the total Direct Material Costs for the Year:

Explanation / Answer

1) total manufacturing cost + beginning WIP -ending WIP = cost of goods manufactured lets assume that the ending WIP is X 2,150,000 + .75x -x          = 2,075,000 .25x                                      = 2,150,000-2,075,000 x                                  = 300000 thus the carrying value of work in process inventory on december 31 is $300,000 2) total manufacturing cost = direct materials + direct labor + overhead applied Applied overhead = 2,150,000*25% 537500 Applied overhead is applied at the rate of 80% of direct labor cost hence direct labor cost = 537500/80% 671875 direct materials = 2,150,000-537,500-671,875 940625 Answer

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