Question

# The following information is given for Sandy Company: a. cost of goods manufactured was \$514,000 b....

```The following information is given for Sandy Company:

a.     cost of goods manufactured was \$514,000

b.     there is no beginning or ending direct material inventory

c.     conversion costs totaled \$360,000 and were equal to three times the prime costs

d.     applied overhead is equal to 340% of direct materials used

e.     beginning finished goods totaled \$10,000

f.      beginning work in process is double the cost of ending work in process

Calculate Sandy Company's beginning work in process inventory balance```

#### Homework Answers

Answer #1
 Conversion cost = 3*Prime cost 360000 = 3*Prime cost Prime cost = 360000/3 120000 Applied overhead = 340%*Direct materials used Prime cost = Direct materials used + Direct labor 120000 = Direct materials + Direct labor Direct labor = 120000 - Direct materials Conversion cost = Direct labor + Applied overhead 360000 = (120000-Direct materials) + (340%*Direct materials used) 360000 = 120000 - Direct materials + 3.4Direct materials 2.4Direct materials = 360000 - 120000 Direct materials = 240000 / 2.4 100000 Total manufacturing cost = Direct materials + Conversion cost = 100000 + 360000 460000 Beginning work in process = 2*Ending work in process Cost of goods manufactured = Total manufacturing cost + Beginning work in process - Ending work in process Cost of goods manufactured = Total manufacturing cost + (2*Ending work in process) - Ending work in process Cost of goods manufactured = Total manufacturing cost + Ending work in process 514000 = 460000 + Ending work in process Ending work in process = 514000 - 460000 54000 Beginning work in process = 2*Ending work in process = 2*54000 108000
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