The accounting records of company iclude the followinginformation relating to th
ID: 2433449 • Letter: T
Question
The accounting records of company iclude the followinginformation relating to the current year: Dec1 Jan1 Materialsinventory...............................................................$20,000 $25,000 Work in processinventory................................................... 37,500 40,000 Finished goods inventory,Jan1(10,000 units@ $21 perunit).. ? 210,000 Purchases of direct materials duringyear............................... 330,000 Direct labor costs assigned toproduction............................. 375,000 Manufacturingoverhead...................................................... 637,500 The company manufactures a single product; during the currentyear, 45,000 units were manufactured and 40,000 units weresold. Prepare a schedule of the cost of finished goods manufacturedfor the current year. (Show a supporting computation of thecost of direct materials used during the year). The accounting records of company iclude the followinginformation relating to the current year: Dec1 Jan1 Materialsinventory...............................................................$20,000 $25,000 Work in processinventory................................................... 37,500 40,000 Finished goods inventory,Jan1(10,000 units@ $21 perunit).. ? 210,000 Purchases of direct materials duringyear............................... 330,000 Direct labor costs assigned toproduction............................. 375,000 Manufacturingoverhead...................................................... 637,500 The company manufactures a single product; during the currentyear, 45,000 units were manufactured and 40,000 units weresold. Prepare a schedule of the cost of finished goods manufacturedfor the current year. (Show a supporting computation of thecost of direct materials used during the year).Explanation / Answer
(a) Preparing theSchedule of Cost of finished goods manufactured:
Idaho Paper Company
Schedule of the Cost of Finished GoodsManufactured
Work in process inventory, beginning of the year
$40,000
Manufacturing costs assigned to production:
Directmaterials used
$335,000A
Directlabor
$375,000
ManufacturingOverhead
$637,500
Total Manufacturingcosts
$1,347,500
Total cost of all work in process during the year
$1,387,500
Less: Work in process inventory, ending of the year
($37,500)
Cost of finished goods manufactured
$1,350,000
Computation of direct materials used:
MaterialsInventory on January 1
$25,000
Purchases ofdirect materials during the year
$330,000
Directmaterials available for use
$355,000
Less: MaterialsInventory on December 31
($20,000)
Direct materials used
$335,000
Idaho Paper Company
Schedule of the Cost of Finished GoodsManufactured
Work in process inventory, beginning of the year
$40,000
Manufacturing costs assigned to production:
Directmaterials used
$335,000A
Directlabor
$375,000
ManufacturingOverhead
$637,500
Total Manufacturingcosts
$1,347,500
Total cost of all work in process during the year
$1,387,500
Less: Work in process inventory, ending of the year
($37,500)
Cost of finished goods manufactured
$1,350,000
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