Home/ Questions/Selected T-accounts of Moore Company are given below for the just completed year:
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Asked: 2022-04-11T18:39:54+00:00 In:

Selected T-accounts of Moore Company are given below for the just completed year:

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Selected T-accounts of Moore Company are given below for the just completed year:
Required:
1. What was the cost of raw materials used in production during the year?
2. How much of the materials in (1) above consisted of indirect materials?
3. How much of the factory labor cost for the year consisted of indirect labor?
4. What was the cost of goods manufactured for the year?
5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied overhead in your answer.
6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year?
7. Was manufacturing overhead underapplied or overapplied? By how much?
8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If $13,950 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?

♦ Relevant knowledge

Raw materials are the inputs needed to make a finished product. In the process of manufacturing different raw materials are needed. For instance, iron ore, dolomite, and coal are necessary to produce sponge iron.
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2 Answers

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    Expert

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  2. Solution 1:
    Cost of Raw materils used in Production
    Beginning raw Materials 35000
    Purchases of materials 160000
    Total raw materials available 195000
    Less: Ending Raw materials 45000
    Cost of Raw materils used in Production 150000
    Solution 2:
    Indirect Materials
    Production costs of raw materials 150000
    Less: Direct materials used 110000
    Indirect materials 40000
    Solution 3:
    Indirect labor cost
    Factory wages accrued (credits to factory wages payable). 220000
    Less: Direct Labor cost 210000
    Indirect labor cost 10000
    Solution 4:
    Cost Of goods Manufactured
    Cost of goods manufactured (Credit in the WIP account). 530000
    Solution 5:
    Unadjusted Cost of goods sold
    beginning Finished Goods inventory 60000
    Add the cost of goods manufactured 530000
    Price of the goods on sale 590000
    Less: Ending Finished Goods inventory 90000
    Unadjusted cost of goods sold 500000
    Solution 6:
    Predetermined Overhead rate
    Overhead calculated (from WIP account). 218400
    Direct labor 210000
    Predetermined Overhead rate 104%
    Solution 7:
    Manufacturing Overhead under/overapplied
    Overhead applied 218400
    Actual Overhead (from manufacturing overhead). 188400
    Overapplied overhead 30000
    Solution 8:
    Ending Balance in Work in process
    Finding balance in your work life is possible 40000
    Direct Materials 110000
    Direct labor 210000
    Overhead 218400
    Lower: The cost of goods manufactured -530000
    Ending Balance in Work in process 48400
    Direct Materials and Applied overhead cost
    Direct Labor Cost 13950
    Predetermined Overhead Rate 104%
    Applied Overhead cost 14508
    Direct Materials Cost (48400-13950-14508) 19942
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