ACCT6111_Fall 2013_Assignment 2_Case 3_Muscat Company_Product Cost Flows

ACCT6111                                                             Fall 2013                               Assignment 2

Case 3: Product Cost Flows

Selected T-accounts for Muscat Company are given below for the just completed year:

                   Raw Materials                                                    Manufacturing Overhead

Bal. 1/1           30,000             Credits             Debits       385,000               Credits

Debits             420,000____________

Bal, 12/31        60,000

                        Work in Process                                           Factory Wages Payable

Bal. 1/1                   70,000     Credits   810.000      Debits       179,000      Bal, 1/1     10,000

Direct materials   320,000                                                                             Credits     175,000

Direct labor            110.000                                                                            Bal. 12/31 6,000

Overhead              400,000________________

Bal. 12/31

                        Finished Goods                                            Cost of Goods Sold

Bal. 1/1             40.000           Credits                                     Debits

Debits________________________

Bal, 12/31            130.000

Required:

1.       What was the cost of raw materials put into 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 cost of goods sold for the year (before considering under-applied or over-applied overhead)?

6.       If overhead is -applied to production on the basis of direct materials cost, what rate was in effect during the year?

7.       Was manufacturing overhead under-applied or over-applied? By how much?

8.       Compute the ending balance in the Work in Process inventory account. Assume that this balance consists entirely of goods started during the year. If $32,000 of this balance is direct materials cost, how much of it is direct labor cost? Manufacturing overhead cost?