The Flow of Manufacturing Costs Through Ledger Accounts
The flow of manufacturing costs through the ledger accounts of Inferior Safes, Inc., in the current year is illustrated below in summarized form:
Work in Process Inventory
Beg. balance$ 10,000
Beg. balance$ 20,000
Ending balance$ 15,000
Finished Goods Inventory
Beg. balance$ 45,000
Ending balance$ 2,000
Ending balance$ 50,000
Cost of Goods Sold
Indicate the amounts requested below. Some amounts are shown in the T accounts above; others require short computations. (Show all computations.)
Purchases of direct materials.
The cost of direct materials used.
Direct labor costs assigned to production.
The year-end liability for direct wages payable.
The overhead application rate in use throughout the year, assuming that overhead is applied as a percentage of direct labor costs.
Total manufacturing costs charged to the Work in Process Inventory account during the current year.
The cost of finished goods manufactured.
The year-end balance in the Work in Progress Inventory account.
The cost of goods sold.
The total amount of inventory listed in the year-end balance sheet.
Alternate Problems for use with Financial and Managerial Accounting, 12e16-3
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