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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