GNB+13e+Solutions+Ch+02+Case

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

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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 ...
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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.

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