# 6.2.PNG - Exercise 6-25 Basic Cost Flow Model[L0 6-3 Assume...

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Unformatted text preview: Exercise 6-25 Basic Cost Flow Model [L0 6-3] Assume that the foilowing events occurred at a division of Generic Electric for March of the cunent year: 1. Purchased \$15 million in direct materials. 2. Incurred direct labor costs of \$8 million. 3. Determined that manufacturing overhead was \$13.5 million. 4. Transferred 1’0 percent of the materials purchased to worlcinprocess. 5. Completed work on 65 percent of the work—in-process. Costs are assigned equally across all work—in—process. 6. The inventory accounts have no beginning balances All costs incurred were debited to the appropriate account and credited to Accounts Payable. Required: Give the amounts for the following items in the Work—in—process account: (Do not round intermediate calculations. Enter your ﬁnal answers in millions rounded to 1 decimal plaoe.) a. Transfers-in (TI) b. Transfersout (T O) i: Ending balance (EB) 55 32.1} million \$ 20.3 million \$ 11.2 million Explanation: a. \$32.0 million = \$8.13 million + \$13.5 million + (0.? x \$15.0 million) I). \$20.8 million = 0.65 x \$32.0 million c. BB+TI7TO=EB U + \$32.0 million — \$20.8 million = EB EB = \$11.2 million ...
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