Question

Selected T-accounts of Moore Company are given below for the just completed year: Raw Materials Bal. 1/1 33,000 Credits ? Debits 156,000 Bal. 12/31 43,000 Manufacturing Overhead Debits 186,200 Credits ? Work in Process Bal. 1/1 38,000 Credits 524,000 Direct materials 108,000 Direct labor 204,000 Overhead 214,200 Bal. 12/31 ? Factory Wages Payable Debits 221,000 Bal. 1/1 18,000 Credits 216,000 Bal. 12/31 13,000 Finished Goods Bal. 1/1 58,000 Credits ? Debits ? Bal. 12/31 87,000 Cost of Goods Sold Debits ? Required: 1. What was the cost of raw materials used in production during the year? 2. How much of the materials in (1) above consisted of indirect materials? 3. How much of the factory labor cost for the year consisted of indirect labor? 4. What was the cost of goods manufactured for the year? 5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied overhead in your answer. 6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year? 7. Was manufacturing overhead underapplied or overapplied? By how much? 8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If $12,500 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?

Raw Materials
Bal. 1/1	33,000	Credits	?
Debits	156,000
Bal. 12/31	43,000

Manufacturing Overhead
Debits	186,200	Credits	?

Work in Process
Bal. 1/1	38,000	Credits	524,000
Direct materials	108,000
Direct labor	204,000
Overhead	214,200
Bal. 12/31	?

Factory Wages Payable
Debits	221,000	Bal. 1/1	18,000
		Credits	216,000
		Bal. 12/31	13,000

Finished Goods
Bal. 1/1	58,000	Credits	?
Debits	?
Bal. 12/31	87,000

Cost of Goods Sold
Debits	?

Answer 1

a) Cost of raw material used = 33000+156000-43000 = 146000

b) Indirect material = 146000-108000 = 38000

c) Indirect labor = 216000-204000 = 12000

d) Cost of goods manufactured = 524000

e) Unadjusted cost of goods sold = 58000+524000-87000 = 495000

f) Overhead rate = 214200/204000 = 105% of labor cost

g) Applied overhead = 214200

Actual overhead = 186200

Over applied overhead = (214200-186200) = 28000

h) Ending work in process = 40200

Direct labor = 12500

Applied overhead = 12500*1.05 = 13125

Direct material = 40200-12500-13125 = 14575