winter\'s , manufacturer of winter coats, current year\'s predetermined overhead

Question

winter's , manufacturer of winter coats, current year's predetermined overhead rate is 75% of direct labor cost.

Prepare the ending inventory value that would be presented on the balance sheet and winter's income statement.

requires : write down the detailed calculation process ( how do you gets those number)

beginning materials inventory 35,000

beginning work in process 20,000

beginning finished goods inventory 15,000

materials purchased 30,000

direct materials requested ?

direct labor cost incurred 30,000

direct labor paid 28,000

overhead applied ?

costs of units completed 50,000

costs of goods sold ?

ending materials inventory 15,000

ending working in process ?

ending finished goods 33,000

sales 60,000

administrative expense 15,000

Explanation / Answer

Winter's (All amounts in $) Working for Inventory Valuation Beginning Materials Inventory 35000 Materials Purchased 30000 65000 Direct Materials Requested 50000 Ending Materials Inventory 15000 Beginning Work in Process 20000 Direct Materials Requested 50000 Direct Labour Cost Incurred 30000 Overheads Applied @ 75% of Labor 22500 122500 Cost of Units Completed 50000 Closing Work in Process 72500 Cost of Units Completed 50000 Beginning Finished Goods Inventory 15000 65000 Cost of Goods Sold 32000 Ending Finished Goods 33000 Sales 60000 Cost of Goods Sold 32000 Gross Profit 28000 Administrative Expenses 15000 Net Income 13000

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