Question

An incomplete subsidiary ledger of materials inventory for May is as follows:

Answer 1

Answer:

An incomplete subsidiary ledger of materials inventory for May is as follows:

A. Materials Issuances and balances for the materials subsidiary ledger under FIFO:

RECEIVED                                ISSUED                            BALANCE

Receiving            Materials      

Report             Unit   Requisition     Unit  

Number Qty Price  Number   Qty  Amount  Date    Qty    Price     Amount

                                                                         May 1   285  $30.00   $8,550

40         130 $32.00              May 4   415                 $12,710

                                      91       365                 May 10 50 $32.00     $1,600

44         110   38.00              May 21 160                 $5,780

                                     97       100                  May 27  60 $38.00    $2,280

B. The materials inventory balance at the end of May is 60 units at $2,280.

C. Debit Work in Process $14,610

Credit Materials $14,610

To record the transfer of materials to work in process.

D. The materials ledger shows the quantities and costs of materials remaining at any point in time.  It also indicates the dates for all related transactions.  With the quantities of materials received in and issued out and the balances indicated clearly, it is possible to ensure that a required level of inventory remains in stock and to place orders at the right time.

Explanation:

a) Raw materials Inventory Issuance:

Quantity issued = 365

Cost of units issued on May 10 =    $11,110 ($12,710 - 1,600)

Cost of units issued on May 27 = $3,500 ($5,780 - 2,280)

Total cost of units issued out   =  $14,610