Problem 3-11 T-Account Analysis of Cost Flows [LO3-2, LO3-3,LO3-4]Selected T-accounts of Moore Company are...Problem...

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Accounting

Problem 3-11 T-Account Analysis of Cost Flows [LO3-2, LO3-3,LO3-4]
Selected T-accounts of Moore Company are given below for thejust completed year:
Raw Materials
Bal. 1/1 23,000 Credits ?
Debits 136,000
Bal. 12/31 33,000
ManufacturingOverhead
Debits 204,720 Credits ?
Work in Process
Bal. 1/1 28,000 Credits 494,000
Direct materials 98,000
Direct labor 174,000
Overhead 222,720
Bal. 12/31 ?
Factory WagesPayable
Debits 201,000 Bal. 1/1 13,000
Credits 196,000
Bal. 12/31 8,000
Finished Goods
Bal. 1/1 48,000 Credits ?
Debits ?
Bal. 12/31 72,000
Cost of Goods Sold
Debits ?
Required:
8. Compute the ending balance in Work in Process. Assume thatthis balance consists entirely of goods started during the year. If$10,000 of this balance is direct labor cost, how much of it isdirect materials cost? Applied overhead cost?

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3.5 Ratings (614 Votes)

8	Work in process ending balance:
		$	$
	Bal. 1/1	28000
	Direct materials	98000
	Direct labor	174000
	Overhead	222720	522720
	Less: Credits		494000
	Bal.12/31		28720

	Ending balance of work in process=$ 28720
	Break up:
	Direct labor=$10000
	Let's assume that factory overhead is allocated based on direct labor cost
	Look into work in process T-account
	Predetermined overhead rate=Overhead/Direct labor cost=222720/174000=$1.28 per direct labor cost
	Hence,Overhead in work in process ending balance=$10000*1.28=$12800
	Balance will be direct material
	Direct material=28720-10000-12800=$5920

	Summary
	Work in process ending inventory
		$
	Direct materials	5920
	Direct labor	10000
	Overhead	12800
	Total	28720

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In: AccountingProblem 3-11 T-Account Analysis of Cost Flows [LO3-2, LO3-3,LO3-4]Selected T-accounts of Moore Company are...Problem 3-11 T-Account Analysis of Cost Flows [LO3-2, LO3-3,LO3-4]Selected T-accounts of Moore Company are given below for thejust completed year:Raw MaterialsBal. 1/123,000Credits?Debits136,000Bal. 12/3133,000ManufacturingOverheadDebits204,720Credits?Work in ProcessBal. 1/128,000Credits494,000Direct materials98,000Direct labor174,000Overhead222,720Bal. 12/31?Factory WagesPayableDebits201,000Bal. 1/113,000Credits196,000Bal. 12/318,000Finished GoodsBal. 1/148,000Credits?Debits?Bal. 12/3172,000Cost of Goods SoldDebits?Required:8. Compute the ending balance in Work in Process. Assume thatthis balance consists entirely of goods started during the year. If$10,000 of this balance is direct labor cost, how much of it isdirect materials cost? Applied overhead cost?

Raw Materials
Bal. 1/1	23,000	Credits	?
Debits	136,000
Bal. 12/31	33,000

Work in Process
Bal. 1/1	28,000	Credits	494,000
Direct materials	98,000
Direct labor	174,000
Overhead	222,720
Bal. 12/31	?

Factory WagesPayable
Debits	201,000	Bal. 1/1	13,000
		Credits	196,000
		Bal. 12/31	8,000