a. Conversion cost was 140,000 and was four times the prime cost b. Direct mater

ID: 2504496 • Letter: A

Question

a. Conversion cost was 140,000 and was four times the prime cost

b. Direct materials used in production equaled 5,000

c. Cost of goods manufactured was 154,000

d. Ending work in process is 40 percent of the cost of beinning work in process

e. There are no beginning or ending inventories for direct materials

f. Cost of good sold was 110 percent of cost of goods manufactured

g. Beginning finished goods inventory was 22,400

1. Using the above information, prepare a cost of goods manufactured statement

2. Using the above information, prepare a cost of goods sold statement.

Please show work so I can follow. Thanks.

DIRECT MATERIAL = 5000

DIRECT EXPENSES [ 35000-5000] = 30000

PRIME COST[140000/4] = 35000

ADD:CONVERSION COST = 140000

ADJUSTMENT FOR WIP

ADD:OPENING WIP = (35000)

LESS:CLOSING WIP = 14000 [NEGATIVE NEGATIVE = PLUS]

COST OF GOODS MANUFACTURED = 154000

ADD:OPENING FINISHED GOODS = 22400

LESS:CLOSING FINISHED GOODS =(7000)

[169400-22400-154000]

COST OF GOODS SOLD[154000*110%] = 169400

WORKING NOTE:-

OPENING WIP BE X

CLOSING WIP =0.4X

35000+140000+X-0.4X = 154000

X = -35000

CLOSING WIP = -35000*0.4 = -14000

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