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10 Jan

prepare a schedule to compute prime costs incurred


SOLUTION AT Australian Expert Writers

Ron Williams recently took over as the controller of Johnson $others Manufacturing. Last month, the previous controller left the company with little notice and left the accounting records in disarray. Ron needs the ending inventory balances to report first quarter numbers.
For the previous month (March 2011) Ron was able to piece together the following information:
Direct materials purchased
$   240,000
Work-in-process inventory, 3/1/2011
$     70,000
Direct materials inventory, 3/1/2011
$     25,000
Finished goods inventory, 3/1/2011
$   320,000
Conversion Costs
$   660,000
Total manufacturing costs added during the period
$   840,000
Cost of goods manufactured
4 times direct materials used
Gross margin as a percentage of revenues
$ 1,037,500
Instructions Calculate the cost of:
Finished goods inventory, 3/31/2011
Work-in-process inventory, 3/31/2011
Direct materials inventory, 3/31/2011
Hiwot Pharmaceuticals Share Company manufactures a single product. The following data present transactions and additional information for November 2007, the company’s first month of operation:
Direct materials purchased on account                                                 $58,000
Direct materials issued to production                                                     40,000
Direct labor costs accrued                                                                       26,000
Factory insurance expired                                                           3,000
Factory utility paid                                                                     2,500
Factory depreciation                                                                   6,000
Finished goods, November 30                                                      3,100 units
Indirect materials purchased on account                                     5,000
Indirect materials issued to production                                                     2,000
Indirect labor costs paid                                                              8,000
Marketing depreciation                                                                            1,800
Miscellaneous office expenses                                                      7,000
Miscellaneous marketing expenses                                              5,500
Office depreciation                                                                      2,500
Office salaries and wages                                                            8,000
Sales on account                                                                       106,000 ($20 per unit)
Sales salaries and wages                                                                9,000
Work in process, November 30                                        14,000 (4,000 units)
Required: Using perpetual inventory system, determine
units sold in November
unit manufactured in November
total cost of goods manufactured in November
unit cost of goods manufactured in November
prepare income statement for November
Cost of goods sold for Fews Share Company for June 2007 was $350,000. Work in process inventory on June 30, 2007 was 95% of work in process inventory on June 1, 2007. Manufacturing overhead costs are determined to be 80% of direct labor costs. During June 2007, $110,000 of direct materials were purchased. Other information for June 2007 follows:
June 1, 2007               June 30, 2007
Direct materials                                   $22,200                       $19,000
Work in process                                    40,000                           ?
Finished goods                                      108,500                     105,000
Required: For June 2007
prepare a schedule to compute prime costs incurred
prepare a schedule to compute conversion costs incurred
prepare a schedule of cost of goods manufactured
prepare a schedule of cost of goods sold

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