C2-26 Salter CompanyData:Raw materials, January 1$18,000 Work in process, January 1$65,000 Finished goods, January 1$45,000 Sales$1,200,000 Manufacturing overhead70% of conversion costsGross margin rate40% of salesDirect labor cost$180,000 Direct labor plus Direct materials cost$410,000 Cost of goods available for sale$810,000 Purchases of raw materials$290,000 1. Calculate Ending Raw Materials InventoryRaw materials, beginning$18,000 Add: Purchases of raw materials$290,000 Raw materials available for use$308,000 Direct materials cost$230,000 (see below)Raw materials, ending$78,000 Direct labor plus Direct materials cost$410,000 (given)Less: Direct labor cost$180,000 (given)Direct materials cost$230,000 MOH = 0.7 x Conversion CostsConversion Costs = DL + MOHMOH = 0.70(180K + MOH)MOH = 126K + 0.7MOH0.3MOH = 126KMOH = 420K2. Calculate Ending Work In Process Inventory
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gross margin, Supply chain management terms, Direct materials cost