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T Accounts Showing Flow of Cost. The Baton Rouge Chemical Company had the following inventories on September 1
Raw materials .... $40,000
Work in process — materials $15,000
Finished goods 25,000
Finished goods 25,000
Work in process — labor 18,000
Work in process — factory overhead . 1 3,500
Work in process — factory overhead . 1 3,500
During the month of September the cost of materials purchased was $100,000, direct labor cost incurred was $90,000, and factory overhead applicable to production was 75% of the direct labor cost. The September 30 inventories were:
Raw materials .... $30,000
Work in process — materials $12,000
Finished goods 47,000
Finished goods 47,000
Work in process — labor 20,000
Work in process — factory overhead . 15,000
Work in process — factory overhead . 15,000
Required: Using three accounts for work in process, prepare T accounts showing the flow of the cost of goods manufactured and sold.
Factory Overhead Rate and Relationship of Cost Elements. A schedule of Cost of goods manufactured shows:
Materials used $150,000
Direct labor 400,000
Overhead costs 300,000
Work in process, ending inventory 120,000
Required: (1) The rate of factory overhead to direct labor cost.
(2) The cost of direct materials included in the work in process ending inventory, assuming that the direct labor cost included in the inventory of work in process is $40,000.
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