Solution for ch3 - EXERCISE 3-24(20 MINUTES 1 Raw-material...

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EXERCISE 3-24 (20 MINUTES) 1 . Raw-material inventory, January 1 ......................................... $185,50 0 Add: Raw-material purchases ................................................ 273,400 Raw material available for use .............................................. $458,90 0 Deduct: Raw-material inventory, January 31 ......................... 173,600 Raw material used in January ................................................ $285,30 0 Direct labor ............................................................................ 410,000 Total prime costs incurred in January ..................................... $695,30 0 2 . Total prime cost incurred in January ...................................... $695,30 0 Applied manufacturing overhead (70% $410,000) ............. 287,000 Total manufacturing cost for January ..................................... $982,30 0 3 . Total manufacturing cost for January ..................................... $ 982,300 Add: Work-in-process inventory, January 1 ............................ 321,700 Subtotal ................................................................................. $1,304,0 00 Deduct: Work-in-process inventory, January 31 ..................... 342,500 Cost of goods manufactured .................................................. $ 961,500 4 . Finished-goods inventory, January 1 ...................................... $ 184,900 Add: Cost of goods manufactured ......................................... 961,500 Cost of goods available for sale ............................................. $1,146,4 00 Deduct: Finished-goods inventory, January 31 ...................... 160,400
Cost of goods sold .................................................................. $ 986,000 Since the company accumulates overapplied or underapplied overhead until the end of the year, no adjustment is made to cost of goods sold until December 31. 5 . Applied manufacturing overhead for January ........................ $287,00 0 Actual manufacturing overhead incurred in January ............. 242,500 Overapplied overhead as of January 31 ................................. $ 44,500

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