GNB+13e+Solutions+Ch+02+Case - C2-26 Salter Company Data:...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: C2-26 Salter Company Data: Raw materials, January 1 Work in process, January 1 Finished goods, January 1 Sales Manufacturing overhead Gross margin rate Direct labor cost Direct labor plus Direct materials cost Cost of goods available for sale Purchases of raw materials $18,000 $65,000 $45,000 $1,200,000 70% of conversion costs 40% of sales $180,000 $410,000 $810,000 $290,000 1. Calculate Ending Raw Materials Inventory Raw materials, beginning Add: Purchases of raw materials Raw materials available for use Direct materials cost Raw materials, ending $18,000 $290,000 $308,000 $230,000 (see below) $78,000 Direct labor plus Direct materials cost Less: Direct labor cost Direct materials cost $410,000 (given) $180,000 (given) $230,000 MOH = 0.7 x Conversion Costs Conversion Costs = DL + MOH MOH = 0.70(180K + MOH) MOH = 126K + 0.7MOH 0.3MOH = 126K MOH = 420K 2. Calculate Ending Work In Process Inventory Direct materials cost $230,000 Direct labor cost $180,000 Manufacturing overhead cost $420,000 Total manufacturing cost $830,000 Add: Work in process, beginning $65,000 $895,000 Less: Cost of goods manufactured $765,000 Work in process, ending $130,000 Cost of goods available for sale Less: Finished goods, beginning Cost of goods manufactured (see above) (given) (see above) (see below) $810,000 (given) $45,000 (given) $765,000 3. Calculate Ending Finished Goods Inventory Finished goods, beginning $45,000 (given) Add: Cost of goods manufactured $765,000 (see above) Cost of goods available for sale $810,000 Less: Cost of goods sold $720,000 (see below) Finished goods, ending $90,000 Sales Gross margin as percent of sales Gross margin Cost of goods sold $1,200,000 (given) 40% $480,000 $720,000 ...
View Full Document

This note was uploaded on 03/08/2012 for the course ECON 155 taught by Professor Klein during the Spring '12 term at University of California, Berkeley.

Ask a homework question - tutors are online