Question

Taylor Industries had a fire and some of its accounting records were destroyed. Available information is presented below for the year ended December 31. Materials inventory, December 31 $ 15,000 Direct materials purchased 28,000 Direct materials used 22,900 Cost of goods manufactured 135,000 Additional information: Factory overhead is 150% of direct labor cost. Finished goods inventory decreased by $18,000 during the year. Work in process inventory increased by $12,000 during the year. Calculate: (a) Materials inventory, January 1 (b) Direct labor cost (c) Factory overhead incurred (d) Cost of goods sold

Answer 1

Answer:

Materials inventory, 1st  December  $ 9,900

Direct Labor =  $ 40,040

Factory Overhead =  $ 60,060

Cost of goods sold  $ 117,000

Explanation:

Materials inventory, 1st  December  $ 9,900

Direct materials purchased 28,000

Materials inventory, December 31 $ 15,000

Direct materials used 22,900

Direct Labor   $ 40,040

Factory Overhead  $ 60,060

Conversion Costs $ 100,100

Total Manufacturing Costs $123,000

Work in process inventory increased by $12,000

Cost of goods manufactured 135,000

Finished goods inventory decreased by $18,000

Cost of goods sold  $ 117,000

Working

Conversion Costs = Direct Labor + Factory Overhead

 100,100 = 100 % + 150%

100,100= 100x+ 150x

100,100= 250 x

x= 100,100/250

x= 400.4

Direct Labor = 100% * 400.4= $ 40,040

Factory Overhead = 150% * 400.4= $ 60,060