Bearkat Corporation is a manufacturing company that uses anactual costing system and produces one...

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Accounting

Bearkat Corporation is a manufacturing company that uses anactual costing system and produces one type of product. On January1 st, they had the following account balances in their threeinventory accounts:
Finished goods $47,000
Raw materials $42,500
Work-in-process $44,000
During the year, Bearkat purchased $760,000 of materials onaccount which consists of both direct and indirect materials. Theyused $221,000 of direct materials and $40,000 of indirectmaterials. Total payroll costs were $522,400 of which $325,000 weredirect, $59,000 were indirect, and the remainder wereadministrative payroll costs. Other costs incurred during the yearwere as follows:
Depreciation (80% related to the factory) $38,000
Rent (factory occupies 60% of the bldg) $50,000
Utilities (70% related to the factory) $36,800
On December 31st, Bearkat had $39,500 in work-in-process and$15,500 in finished goods. The raw materials balance on December31st is unknown. Based on this information, answer the following(label your answers to receive full credit):
a. What were the conversion costs and period costs for theyear?
b.What was the cost of goods manufactured for the year?
c.What was the cost of goods sold for the year?
d.If Bearkat incurred an operating loss of $49,300, what was theamount of sales?

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4.3 Ratings (831 Votes)

Solution a Computation of conversion cost for the year Particulars Amount Direct labor 32500000 Manufacturing overhead Indirect Materials 4000000 Indirect labor 5900000 Factory Depreciation 3800080 3040000 Factory Rent 50000 60 3000000 Factory See Answer

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In: AccountingBearkat Corporation is a manufacturing company that uses anactual costing system and produces one type...Bearkat Corporation is a manufacturing company that uses anactual costing system and produces one type of product. On January1 st, they had the following account balances in their threeinventory accounts:Finished goods $47,000Raw materials $42,500Work-in-process $44,000During the year, Bearkat purchased $760,000 of materials onaccount which consists of both direct and indirect materials. Theyused $221,000 of direct materials and $40,000 of indirectmaterials. Total payroll costs were $522,400 of which $325,000 weredirect, $59,000 were indirect, and the remainder wereadministrative payroll costs. Other costs incurred during the yearwere as follows:Depreciation (80% related to the factory) $38,000Rent (factory occupies 60% of the bldg) $50,000Utilities (70% related to the factory) $36,800On December 31st, Bearkat had $39,500 in work-in-process and$15,500 in finished goods. The raw materials balance on December31st is unknown. Based on this information, answer the following(label your answers to receive full credit):a. What were the conversion costs and period costs for theyear?b.What was the cost of goods manufactured for the year?c.What was the cost of goods sold for the year?d.If Bearkat incurred an operating loss of $49,300, what was theamount of sales?