prepare a schedule to compute prime costs incurred

Exercise

  1. Ron Williams recently took over as the controller of Johnson $others Manufacturing. Last month, the previous controller left the company with little notice and left the accounting records in disarray. Ron needs the ending inventory balances to report first quarter numbers.

For the previous month (March 2011) Ron was able to piece together the following information:

Direct materials purchased $   240,000
Work-in-process inventory, 3/1/2011 $     70,000
Direct materials inventory, 3/1/2011 $     25,000
Finished goods inventory, 3/1/2011 $   320,000
Conversion Costs $   660,000
Total manufacturing costs added during the period $   840,000
Cost of goods manufactured 4 times direct materials used
Gross margin as a percentage of revenues 20%
Revenues $ 1,037,500

 

Instructions Calculate the cost of:

  1. Finished goods inventory, 3/31/2011
  2. Work-in-process inventory, 3/31/2011
  • Direct materials inventory, 3/31/2011

 

 

 

 

  1. Hiwot Pharmaceuticals Share Company manufactures a single product. The following data present transactions and additional information for November 2007, the company’s first month of operation:

Direct materials purchased on account                                                 $58,000

Direct materials issued to production                                                     40,000

Direct labor costs accrued                                                                       26,000

Factory insurance expired                                                           3,000

Factory utility paid                                                                     2,500

Factory depreciation                                                                   6,000

Finished goods, November 30                                                      3,100 units

Indirect materials purchased on account                                     5,000

Indirect materials issued to production                                                     2,000

Indirect labor costs paid                                                              8,000

Marketing depreciation                                                                            1,800

Miscellaneous office expenses                                                      7,000

Miscellaneous marketing expenses                                              5,500

Office depreciation                                                                      2,500

Office salaries and wages                                                            8,000

Sales on account                                                                       106,000 ($20 per unit)

Sales salaries and wages                                                                9,000

Work in process, November 30                                        14,000 (4,000 units)

 

 

Required: Using perpetual inventory system, determine

  1. units sold in November
  2. unit manufactured in November
  3. total cost of goods manufactured in November
  4. unit cost of goods manufactured in November
  5. prepare income statement for November
  1. Cost of goods sold for Fews Share Company for June 2007 was $350,000. Work in process inventory on June 30, 2007 was 95% of work in process inventory on June 1, 2007. Manufacturing overhead costs are determined to be 80% of direct labor costs. During June 2007, $110,000 of direct materials were purchased. Other information for June 2007 follows:

 

June 1, 2007               June 30, 2007

Direct materials                                   $22,200                       $19,000

Work in process                                    40,000                           ?

Finished goods                                      108,500                     105,000

 

Required: For June 2007

  1. prepare a schedule to compute prime costs incurred
  2. prepare a schedule to compute conversion costs incurred
  3. prepare a schedule of cost of goods manufactured
  4. prepare a schedule of cost of goods sold
find the cost of your paper

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