CE $14-2$

An analysis of the accounts of Williams Company reveals the following manufacturing cost data for the month ended September $30,2020.$

$\backslash$table$[[$Inventories$,$Beginning,Ending$],[$Raw

materials, Begining: $$12,000,$Ending: $$11,300]$

Work in Process, begining: $7500,$ ending: $5000$

$[$Finished goods, begining: $10,000,$ ending: $12,000].$

Costs incurred: raw materials purchase $$62,500,$ direct labor $$51,000,$ manufacturing overhead $$25,650.$ The specific overhead costs were: indirect labor $$6,500,$ factory insurrance $$5,000,$ machinery depreciation $$6,000,$ machinery repairs $$2,800,$ factory utilities $$3600,$ miscellaneous factory costs $$1750.$ Assumr that all materials used were direct materials.

Intructions

$($a$)$ Prepare the cost of goods manufactured schedule for the month ended September $30,2020.$

$($b$)$ Show the presentation of the ending inventories on September $30,2020,$ balance sheet.

$($c$)$ Williams Company is considering the purchase of new automated assembly line for its factory. The purchase would result in several changes in Williams' cost structure. Both direct labor and indirect labor would decrese by $40\%.$ Factory insurance would increase to $$8,000$ machinery depreciation would double, machinery repairs would decrease to $$500$ utilities would decrease to $$2,500$ and miscellaneous factory costs would increase to $$1,850.$ Materials usage would remain at current levels. $(1)$ Analyze the new purchase by preparing a cost of goods manufactured schedule for September $30,2020$ using the new data. $(2)$ Should Williams Company make this purchase? $(3)$ Explain the factors that should be considered in the decision.