Selected T-accounts of Moore Company are given below for the just completed year

Question

Selected T-accounts of Moore Company are given below for the just completed year:

Required:

1. What was the cost of raw materials used in production during the year?

2. How much of the materials in (1) above consisted of indirect materials?

3. How much of the factory labor cost for the year consisted of indirect labor?

4. What was the cost of goods manufactured for the year?

5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied overhead in your answer.

6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year?

7. Was manufacturing overhead underapplied or overapplied? By how much?

8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If $10,750 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?

Raw Materials Bal. 1/1 26,000 Credits ? Debits 142,000 Bal. 12/31 36,000

Explanation / Answer

SOLUTION

1. Cost of raw materials used in production-

2. Indirect materials-

3. Indirect Labor-

4. Cost of goods manufactured-

Cost of goods manufactured during the year is $503,000, as given in the credit of work in process acoount.

Amount ($) Beginning balance of the raw materials 26,000 Add: Purchases 142,000 Total available materials 168,000 Less: Ending materials (36,000) Materials put into production 132,000

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