At the end of February, after the second month of operations of Able Baker Charl

Question

At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. Review the following data and fill in the missing amounts on the chart for Able Baker Charlie Company. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured.

Data for February

Account

Account Balances

Costs Incurred

Jan. 31

Feb. 28

Data for February

Decrease in materials inventory $3,000 Materials inventory on Feb. 28 50% of materials inventory on Jan. 31 Direct materials purchased $11,700 Direct materials used 3 times the direct labor incurred Total manufacturing costs incurred in period $28,700 Total manufacturing costs incurred in period 70% of Cost of Goods Manufactured Total manufacturing costs incurred in period $8,000 less than Cost of Goods Sold

Explanation / Answer

Working Note:-

ans Account 31-Jan 28-Feb Materials Inventory 6000 3000 Work in process inventory 21,000 8700 Finshed goods Inventory 23500 15,500

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