Cost Flow in a Manufacturing Company

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 
Work in process — labor                    18,000
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 
Work in process — labor 20,000
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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