Exam 2 Help Save & ExitSubmit Ryde and Rowe Inc. had the following account balan

Question

Exam 2 Help Save & ExitSubmit Ryde and Rowe Inc. had the following account balances as of January 1 24 DISECE uterinzs Eacencr $ 8,700 76,500 53,000 Manufacturing overhead 15 points During the month of January. all of the following occurred. 8 1. Direct labor costs were $48,000 for 1,800 hours worked 2. Direct materials costing $30,000 and indirect materials costing $4,300 were purchased 3. Sales commissions of $17,000 were earned by the sales force. 4. $23,000 worth of direct materials were used in production. sing costs of $6,300 were incurred 6. Factory supervisors earned salaries of $12,253. 7. Indirect labor costs for the month were $3,000 8. Monthly depreciation on factory equipment was $4,500. 9. Utilities expense of $5.267 was incurred in the factory. 10. Equipment with manufacturing costs of $69,000 were transferred to finished goods. 11. Monthly insurance costs for the factory were $4,200 12. $5,000 in property taxes on the factory were incurred and paid. 13. Equipment with manufacturing costs of $94,805 were sold for $172,372 Required a. If Ryde and Rowe assigns manufacturing overhead of $34,400, what will be the balances in the Direct Materials, Work in Process and Finished Goods Inventory accounts at the end of January? b. As of January 31, what will be the balance in the Manufacturing Overhead account? c. What was Ryde and Rowe's operating income for January? Work in process inventory

Explanation / Answer

SOLUTION

A. Inventories Account-

B.

C. Operating Income for the month of January-

Particulars Amount ($) Direct materials inventory, Jan 1 8,700 Add: Direct materails purchased 30,000 Less: Direct materials used in production (23,000) Direct materials inventory, Jan 31 15,700 Work in progress inventory, Jan 1 76,500 Add: Direct materails used 23,000 Add: Direct labor used 48,000 Add: Manufacturing overhead 34,400 Less: Finished goods transferred out (69,000) Work in progress inventory, Jan 31 112,900 Finished goods inventory, Jan 1 53,000 Add: Goods transferred in 69,000 Less: Cost of goods sold (94,805) Finished goods inventory, Jan 31 27,195

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