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Selected information from the Blake Corporation accounting records for June follows: Materials Inventory BB (6/1) 95,000 467,000 422,000 Work-In-Process Inventory Labor 400,000 EB(6/30) 600,000 Finished Goods Inventory BB...

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Accounting

Selected information from the Blake Corporation accountingrecords for June follows:

Materials Inventory
BB (6/1)95,000
467,000422,000
Work-In-Process Inventory
Labor400,000
EB(6/30)600,000
Finished Goods Inventory
BB (6/1)297,000
842,000839,000
Cost of Goods Sold
30,000
Manufacturing Overhead Control
370,000
370,000
Applied Manufacturing Overhead
400,000
370,000
30,000

Additional information for June follows:

  • Labor wage rate was $20 per hour.
  • During the month, sales revenue was $1,041,000, and selling andadministrative costs were $242,000.
  • This company has no indirect materials or supplies.
  • The company applies manufacturing overhead on the basis ofdirect labor-hours.  

Required:

a. What was the cost of direct materialspurchased in June?

b. What was the over- or underappliedmanufacturing overhead for June?

c. What was the manufacturing overheadapplication rate in June?

d. What was the cost of products completedduring June?

e. What was the balance of the Work-in-ProcessInventory account at the beginning of June?

f. What was the operating profit (or loss) forJune? (Negative amounts should be indicated by a minussign.)

Answer & Explanation Solved by verified expert
3.9 Ratings (749 Votes)

a. Direct Material purchase:- $467000
b.Overhead applied Overhead :- $30000
c. Manufacturing Overhead Application Rate:-
Estimated Overhead:- 400000
Labour Hour :$400000/20= 2000 Hour
Overhead Application Rate:- 400000/2000=$20/Hour
d: Cost of Product completed :- $842000
e. WIP Beginning Balance
Amount Amount
Opening WIP ( BF) $2,20,000 Finished Goods Inventory $8,42,000
Material inventory $4,22,000 Ending WIP $6,00,000
Labour $4,00,000
Applied OH $4,00,000
$14,42,000 $14,42,000
Hence Opening WIP:- $220000
f. Income statement
Sales $10,41,000
Less: Cost of Goods Sold $8,09,000
Less: Selling & Administrative expense $2,42,000
Net Operating Loss -$10,000
W/ Note:Cost of Goods Sold
Amount Amount
Fiished Goods Inventory $8,39,000 Applied OH $30,000
Income Summary $8,09,000
$8,39,000 $8,39,000

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