Ac 505 Case Study I

Trying to get to the Conversion cost. Direct labor = 220,000 = 35% of conversion costs = 220,000/.

35 = 628,571. 42 Manufacturing Overhead = 628,571 – 220,000 = 408,571 Prime cost = direct material cost + 220,000 545,000 = direct material cost + 220,000 545,000 – 220,000 = 325,000 Direct material cost = 325,000 Gross Margin = 30% of $1,350,000 = 405,000. $1,350,000 – 405,000 = 945,000 Ending balance finished goods = 945,000 Cost of Goods Available for Sale$1,020,000 – Finished Goods Inventory (Beginning) 35,000 Cost of Goods Manufactured $985,000 Cost of Goods sold: Beginning balance finished goods$ 35,000 + Cost of Goods Manufactured$985,000 Goods available for sale$1020,000 – Ending balance finished goods 945,000 Cost of goods sold $ 75,000 Manufacturing Costs: Direct Materials$325,000 Direct Labor 220,000 Manufacturing overhead 408,471 Total$ 953,471 Cost of Goods Manufactured Beginning works in process balance$56,000 Total manufacturing costs953,471 – Ending balance work in progress ? .

Cost of Good Manufactured $985,000 (Total Manufacturing cost + Beginning works in process balance) – Cost of Goods Manufactured 953,471 + 56,000 = 1009,471 1009,471 – 985,000 = $24,471 Cost of Goods Manufactured Direct Materials Beginning Raw Materials Inventory$41,000 + Purchases of Materials325,000 Materials available for use $366,000 ————————————————- * Raw Materials Cost the day of the storm $ 325,000 * Work in process 24,471 * Finished Goods Inventory 75,000