The controller at Lawrence Components asks for your help in sorting out some cos

Question

The controller at Lawrence Components asks for your help in sorting out some cost information. She is called to a meeting, but hands you the following information for April:

    

Required:

a. Compute the direct material used for the month of April.

  

b. Compute the direct material inventory as of April 1.

  

c. Compute the conversion cost for the month of April.

  

d. Compute the work-in-process inventory as of April 30.

  

e. Compute the manufacturing overhead for the month of April.

  

f. Compute the finished goods inventory as of April 1.

  

Prime costs, April $ 151,000 Total manufacturing costs, April 270,000 Cost of goods manufactured, April 269,000 Cost of goods sold, April 220,000 Direct material inventory, April 30 15,300 Work-in-process inventory, April 1 9,700 Finished goods inventory, April 30 79,000 Direct materials purchased, April 82,000 Direct labor costs, April 57,000

Explanation / Answer

Solution:

a. direct material used for the month of April

Prime Cost = Cost of direct material used + Cost of direct labor

151,000 = Cost of direct material used + 57,000

Cost of direct material used = 151,000 – 57,000 = $94,000

b) Direct material inventory April 1

Cost of direct material used = Direct material inventory April 1 + Material Purchases during April – Direct material inventory April 30

94,000 = Direct material inventory April 1 + 82,000 – 15,300

Direct material inventory April 1 = $27,300

c) Conversion Cost for April

Indirect Expense or Indirect labor cost = Total Manufacturing Cost – Prime Cost = 270,000 – 151,000 = 119,000

Conversion Cost = Direct labor cost + Indirect Labor Cost

= 57,000 + 119,000

= $176,000

d) work-in-process inventory as of April 30.

Cost of Goods Manufactured = Beginning WIP + Total Manufacturing Cost – Work In Process April 30

269,000 = 9,700 + 270,000 - Work In Process April 30

Work In Process April 30 = $10,700

Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for remaining parts.

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