Question

The financial recorde for the Lazer Manufacturing Company have been destroyed in a flood. The following information has been obtained from a seperate set of books maintained by the cost accountant. The cost accountant now asks for your assistance in computing the missing amounts.
Beginning Ending
direct materials $ 6,000 $ 7,200
WIP $ 8,200 a
finished goods b $ 5,200
other information:
direct materials used $ 20,000
direct labor $ 14,200
overhead applied $ 8,000
cost of goods manufactured $ 40,000
cost of goods sold $ 60,000


a. compute ending WIP

b. compute beginning finished goods inventory

c. compute direct materials purchased

Answer 1

Answer:

a. $10,400

b.$25,200

c. $19,200

Explanation:

The computation of given question is shown below:-

Total manufacturing cost = direct material used + direct labor + overhead applied

= $20,000 + $14,200 + $8,000

= $42,200

a. Ending work in process = Beginning work in process + Total manufacturing cost - Cost of goods manufactured

= $8,200 + $42,200 - $40,000

= $10,400

b. Beginning finished goods inventory = Ending finished goods inventory + Cost of goods sold - Cost of goods manufactured

= $5,200 + $60,000 - $40,000

= $25,200

c. Direct material purchase = Ending direct material + direct material used - beginning direct material

= $7,200 + $20,000 - $8,000

= $19,200