Question

The debts to Work in Processembly Deant for April, together with data concerning production are as follows: $ 7,500 April 1. work in process Materials cost, 3.000 units Conversion costs, 3.000 units, 8096 completed Materials added during April 10,000 units Conversion costs during April Goods finished during April, 11.500 units April 30 work in process, 1.500 units, 60% completed 6.00 29,000 35,000 All direct materials are placed in process at the beginning of the process and the average cost method is used to cost inventories, 40. The materials cost per equivalent unit (to the nearest cent) for April is: a. S2.60 b. $2.81 c. $3.02 d $2.26 oblem 41. The following data (in thousands of dollars) have been taken from the accounting records of Raybum Corporation for the current year. $1,980 280 460 400 300 Sales Selling expenses Manufacturing overhead Direct labor Administrative expenses Purchases of raw materials Finished goods inventory, beginning Finished goods inventory, ending Raw materials inventory, beginning Raw materials inventory, ending Work in process inventory, beginning Work in process inventory, ending 240 240 320 80 140 140 100 Required: (Present all reports and calculations in thousands of dollars) (@) What was the cost of the raw materials used in production during the year? (b) What was the cost of goods manufactured (finished) for the year? (C) What was the cost of goods sold for the year? (d) What was the net income for the year?

Answer 1

40 Equivalent units for Material Equivalent Unit Material Units to be accounted for:- Units Completed & transferred out Ending work in Process Total Units 11500 1500 13000 Units completed and transferred and Units in ending Inv are 100% complete in regards of material. Cost Per Equivalent Unit Material $ $ Cost to be accounted For:- Beginning work in process Cost added during month Total Cost 7,500 29,000 36,500 (A) $ Equivalent Units Cost per Equivalent unit 13000 2.81 Option b (A)/(B)

Add Direct Material Used in Production Beginning Inventory of Raw Material Raw Material purchased Raw material Available for use Ending Inventory of Raw Material Direct Material used in production $ $ $ $ $ 80 240 320 140 180 less (b) Cost of Goods Manufactured Direct Material used in production Direct Labor Manufacturing Overhead Total Manufacturing cost Beginning Work in Process Total cost of Work in process Ending Work in Process Cost of Goods Manufactured $ $ $ $ $ $ $ $ 180 400 460 1,040 140 1,180 100 1,080 Add less (c) Cost of Goods sold Add Beginning Finished Goods Inventory Cost of Goods Manufactured Cost of goods available for sale Ending Inventory of Finished Goods Cost Of Goods Sold $ $ $ $ $ 240 1,080 1,320 320 1,000 Less (d) Income Statement less Sales Revenue Cost of Goods Sold Gross Profit Selling, general Administrative Expense Total Expense Net Income $ $ $ $ 1,980 1,000 980 280 Less 300 $ $ 580 400