The following information applies to the questions displayed below.] Edison Comp

Question

The following information applies to the questions displayed below.] Edison Company manufactures wool blankets and accounts for product costs using process costing. The following information is available regarding its May inventories Beginning Inventory Ending Raw materials inventory Goods in process inventory Finished goods inventory Inventory $51,000 46,000 539,000 28,001 423,000 630,000 The following additional information describes the company's production activities for May Raw materials purchases (on credit) Factory payroll cost (paid in cash) Other overhead cost (Other Accounts credited $ 270,000 2,083,600 92,000 Materials used $ 167,500 60,000 Direct Indirect Labor used Direct Indirect $ 1,263,600 820,000 130% Overhead rate as a percent of direct labor Sales (on credit) $3,000,000 The predetermined overhead rate was computed at the beginning of the year as 130% of direct labor best. 10.00 points Required: 20

Explanation / Answer

Cost of goods transferred and cost of goods sold Particulars Amount Beginning goods in process inventory $            423,000 Direct materials used in production $            167,500 direct labor in production $        1,263,600 Overhead applied ( 130% of direct labor) $        1,642,680 Total production costs $        3,496,780 Less: Ending goods in process inventory $         (539,000) Transferred to finished goods inventory $        2,957,780 beginning finished goods invenory $            630,000 Plus goods transferred from production $        2,957,780 Goods available for sale $        3,587,780 less: ending finished goods inventory $            (28,001) Cost of goods sold $        3,559,779 Date Accounts title and Explanation Debit   Credit 31-May Raw materials $            270,000 Accounts payable $            270,000 ( To record the purchase of raw materials 31-May Goods in process inventory $            167,500 Raw materials $            167,500 ( To record the usage of direct materials) 31-May Factory overhead $              60,000 Raw material inventory $              60,000 ( To record the usage of indirect materials) 31-May Factory payroll $        2,083,600 cash $        2,083,600 ( To record the payment of factory payroll) 31-May Goods in process inventory $        1,263,600 factory payroll $        1,263,600 ( To record the used direct labor 31-May Factory overhead $            820,000 Factory payroll $            820,000 ( To record indirect labor) 31-May factory overhead $              92,000 other accounts $              92,000 ( To record the incurrence of other overhead costs 31-May Goods in process inventory $        1,642,680 Factory overhead $        1,642,680 ( To record applied overhead) 31-May finished goods $        2,957,780 Goods in process inventory $        2,957,780 ( To record the goods transferred) 31-May Accounts receivable $        3,000,000 Sales $        3,000,000 ( To record sale of finished goods) 31-May Cost of goods sold $        3,559,779 Finished goods inventory $        3,559,779

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.