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Problem 16.3A

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:

Materials Inventory

Work in Process Inventory

Beg. balance$  10,000

Beg. balance$  20,000

280,000

?

?

618,000

Ending balance$  15,000

140,000

210,000

Ending balance?

Direct Labor

Finished Goods Inventory

$138,000

$140,000

Beg. balance$  45,000

Ending balance$    2,000

618,000

?

Ending balance$  50,000

Manufacturing Overhead

Cost of Goods Sold

$210,000

$210,000

?

Instructions

Indicate the amounts requested below.  Some amounts are shown in the T accounts above; others require short computations.  (Show all computations.)

a.

Purchases of direct materials.

b.

The cost of direct materials used.

c.

Direct labor costs assigned to production.

d.

The year-end liability for direct wages payable.

e.

The overhead application rate in use throughout the year, assuming that overhead is applied as a percentage of direct labor costs.

f.

Total manufacturing costs charged to the Work in Process Inventory account during the current year.

g.

The cost of finished goods manufactured.

h.

The year-end balance in the Work in Progress Inventory account.

i.

The cost of goods sold.

j.

The total amount of inventory listed in the year-end balance sheet.

Alternate Problems for use with Financial and Managerial Accounting, 12e16-3

© The McGraw-Hill Companies, 2002

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