Rodman Company has the following balances as of December 31, 20X7. Materials Inv
ID: 2526224 • Letter: R
Question
Rodman Company has the following balances as of December 31, 20X7.
Materials Inventory $15,000 dr.
Work in process inventory $36,200 dr.
Finished goods inventory $50,100 dr.
Manufactoring Overhead (after allocation) $3,500 dr.
Cost of goods sold $74,500 dr.
Additional information is as follows:
Cost of materials purchased during 20X7 $41,000
Cost of direct materials requisitioned in 20X7 $47,000
Cost of indirect materials requisitioned in 20X7 $8,000
Cost of goods completed in 20X7 $105,000
Manufacturing overhead allocated (120% of direct labor) $51,000
REQUIRED:
a) January 1, 20X7, materials inventory
b) January 1, 20X7, work in process inventory
c) January 1, 20X7, finished goods inventory
d) Actual manufacturing overhead incurred
Explanation / Answer
a) January 1, 20X7, materials inventory - $29,000
= $15,000 + $47,000 + $8,000-$41,000
= $29,000
b) January 1, 20X7, work in process inventory - $700
Direct labor = $51,000/1.2 = $42,500
work in process inventory = $36,200 + $105,000-$47,000-$51,000-$42,500
= $700
c) January 1, 20X7, finished goods inventory - $19,600
= $50,100 + $74,500-$105,000
= $19,600
d) Actual manufacturing overhead incurred - $54,500
= $51,000 + $3,500
= $54,500
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