Question

Brown Motor company manufactures cars. During March the company purchased 10,000 batteries at cost of $100 per battery. Brown withdrew 8,000 batteries from the warehouse during the month. Of these 500 were used to replace the batteries in the cars used by traveling sales staff. The remaining 7,500 batteries were put into cars manufactured during the month.

Of the cars put into production during March , 80% were completed and transferred to the company's storage lot. Of the cars completed during the month, 75% were sold by March 31st.

Determine the cost of the batteries that would appear in each of the following accounts at March 31st. Show work.

Raw Materials=

work IN Progress=

Finished GOODS=

COST OF GOODS SOLD =

SELLING EXPENSE =

TOTAL COST =

Answer 1

lotal Total 1600 D Batteries Purchased a 10,000 batteries Cost of batteries purchared = 10,000 x $100 = $1,000,000 material = Total batteries - Withdrew from ware howe. = 10,000 - 8600 Raw = 2000 batteries Work in progress & batteries in production - used for (ewithdrew from ware hours) Sales Staff - batteries in complete manufacture. * batteries in complete manal facture = 80% of batteries put into manufacture & 80% of 7500. = 6000 batteries . Work in progrey = 8000 - 500 - 6000. 1500 batteries

finished goods VO & 25% of goods transfred to warehouse - 25% of 6000 - 1500 batteries. SOLD - 75% of goods Completed - 75% of 6000 4500 batteries COST OF GOODS

Cost of RM - 2000 batteries & $100 = $ 200,000 Cost of Work in progres = 1500 batteries x $100 $ 150,000 Cont of Finished goodle = 1500 batteries & $ 100 - $ 159,000 Cost of Goods Sold = 4500 batteries & $100 = $ 450,000 Selling expenes & batteries quen to Sales Staff & Cost per batteries = 500 batteries x $100 = $ 50,000 - - Total Cost = (total battering a batteries gruen to Sale staff ) x Colt per battery (10000 - 500 x $100 = 9500 Ⓡ$100 = $950000