Question

Furr Fabricators produces protective covers for smart phones. Since the covers must be customized to each smart phone model, Furr uses a job order costing system. On September 1, the company reported the following inventory balances: Direct Materials $8,500 Work in Process $34,600 Finished Goods $53,200 During September, the following events occurred:

1.Furr purchased direct materials costing $372,000 on account. 2.Furr used $364,000 in direct materials in production. 3.Furr’s employees clocked 20,000 direct labor hours at an average wage rate of $15 per direct labor hour. 4.The company incurred $428,000 in manufacturing overhead, including $77,200 in indirect labor costs. 5.Using direct labor hours as the application base, the company applied $420,000 of manufacturing overhead to jobs worked on in September. 6.The company completed production on jobs costing $1,040,000. 7.The company delivered jobs costing $990,000 to customers.

Calculate the ending September balance of the Direct Materials, Work in Process, and Finished Goods Inventory accounts. Calculate total manufacturing costs for September.

Answer 1

Calculation of ending september balances
Direct materials
A	Opening Balance	8,500
B	Purchased	3,72,000
C	Used	364000
A+B-C	End bal	16,500
Work in process
A	Opening Balance	34,600
B	Used in production	3,64,000
C	Direct Lab hrs	300000
D	Man Fac OH	420000
E	Finished production	1040000
A+B+C+D-E	End bal	78,600
Finished goods
A	Opening Balance	53200
B	Finished production	1040000
C	Jobs delivered	990000
A+B-C	End bal	1,03,200

Ending sep balances
Direct Materials		16500
Work in progress	78600
Finished Goods		103200

Total manufactuuring costs for september

Direct material	364000
Direct Labour	300000
Overhead	420000
Total manufacturing costs for september	1084000