11) The following information is available for the Blizzard Corporation for 2009

ID: 2475853 • Letter: 1

Question

11) The following information is available for the Blizzard Corporation for 2009:

· Materials inventory decreased $4,000 during 2009.

· Materials inventory on December 31, 2009, was 50% of materials inventory on January 1, 2009.

· Beginning work in process inventory was $145,000.

· Ending finished goods inventory was $65,000.

· Purchases of direct materials were $154,700.

· Direct materials used were 2.5 times the cost of direct labor.

· Manufacturing overhead was 50% of the cost of direct labor.

· Total manufacturing costs incurred were $246,400, 80% of cost of goods manufactured and $156,000 less than cost of goods sold.

Compute:

a) finished goods inventory on January 1, 2009

b) work in process inventory on December 31, 2009

c) direct labor incurred

d) manufacturing overhead incurred

e) direct materials used

f) materials inventory on January 1, 2009

g) materials inventory on December 31, 2009

a) finished goods inventory on January 1, 2009

Finished Goods (beginning) = Cost of Goods Sold + Finished Goods Inventory (ending) - Cost of Goods manufactured

= 402400 +65,000 - 3,08,000= 1,59,400

Cost Of Goods Manufactured = 246400 / 80% = 3,08,000

Cost of goods sold = 246400 + 1,56,000= 402400

b) work in process inventory on December 31, 2009

Beginning WIP + Manufacturing costs - Cost of goods manufactured= Ending Work in Process

1,45,000+ 2,46,400 -3,08,000 = $83,400

c. ) direct labor incurred = 154700 / 2.5 = 61880

d) manufacturing overhead incurred = 50% of direct labour cost = 50% * 61880 =30940

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