Problem 1 The accounting records of Cinotti Manufacturing Company include the fo
ID: 2445289 • Letter: P
Question
Problem 1 The accounting records of Cinotti Manufacturing Company include the following information:
Dec. 31, 2017
Dec. 31, 2016
Work in process inventory
$ 10,700
$ 12,200
Finished goods inventory
35,000
32,600
Materials purchased
116,300
Raw materials inventory
?
18,000
Indirect materials transferred to production
12,100
Direct materials used
115,400
Manufacturing overhead applied
133,100
Manufacturing overhead incurred
134,600
Direct labor incurred
120,000
Selling expenses
67,000
Calculate the following:
1. Raw materials inventory at 12-31-17
2. Total manufacturing costs during 2017
3. Cost of goods manufactured during 2017
4. Cost of goods sold for 2017
5. Total product costs for the year ending December 31, 2017. Label the financial statements and specific sections on which these amounts are reported
Dec. 31, 2017
Dec. 31, 2016
Work in process inventory
$ 10,700
$ 12,200
Finished goods inventory
35,000
32,600
Materials purchased
116,300
Raw materials inventory
?
18,000
Indirect materials transferred to production
12,100
Direct materials used
115,400
Manufacturing overhead applied
133,100
Manufacturing overhead incurred
134,600
Direct labor incurred
120,000
Selling expenses
67,000
Explanation / Answer
Closing Material Inventory = Opening Value of Material + Purchases - Issued to production/ Used
The process is material goes into Work in progress then Finished good.
First we have to calculate the value of material received in Work in Progress from Raw material
Issed to WIP = Closing WIP+ Material used - Opening
=1200+115400-10700 = 118120
Now, In raw material account,
To find Closing balance = Opening + Purchased material - Indirect material Transferred - Material Issued to WIP
= 18000+116300-12100-118120
=4080
Manufacturing Cost
Indirect material + Direct Material used+ Manufacturing Overhead Incurred+ Direct Labour incurred
+12100+115400+ 134600+120000 = 382100
Total final goods produced in 2017 = 35000 units
So. Manufacturing cost is 382100 / 35000
Total Product Cost = MAnufacturing cost + Selling cost
= 382100 + 67000 = 449100
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