Question

The following information was extracted from the accounting records of Nimoy Mfg. LLP: On February 5, 2019, Nimoy Mfg. LLP ordered 225,000 pounds of material from its supplier at a total purchase price of $450,000. The materials were to be shipped via Scott Transporter Co. under FOB Destination terms. On February 12, 2019, Nimoy Mfg. LLP received the goods with an invoice from its supplier that included a 15% volume discount off the original purchase price. On February 13, 2019, the appropriate party received an invoice from Scott Transporter Co. for $2,500 of freight charges. On February 15, 2019, Nimoy Mfg. LLP incurred $54,000 in costs to prepare the materials for use in its manufacturing process. During the remainder of February 2019, Nimoy Mfg. LLP transferred 190,000 pounds of the materials purchased earlier in the month into the factory. Compute the Total Historic Cost of the materials purchased and prepared by Nimoy Mfg. LLP during February 2019.

Answer 1

Answer:

unit cost: $1.94

transferred to production: $ 368.600‬

ending materials inventory: $  67,900

Explanation:

225,000 at 450,000

discount of 15% = 67,500

the terms were FOB destination thus, are property of the suplies until they reach the port of the buyer. The supplier is the party who pays the freights.

the 54,000 will be activate through materials

materials up to this point:

450,000 - 67,500 discount + 54,000 preparation cost = 436,5‬00

cost per unit: 436,500 / 225,000 = 1.94 dollars

transferred to production:

1.94 x 190,000 = 368.600‬

ending materials inventory: 436,500 - 368,600 = 67,900