1. Given for Flexible Products, Inc.: ***(show your work)*** The following Given

Question

1.  Given for Flexible Products, Inc.:  ***(show your work)***

The following

Given for Flexible Products, Inc.: ***(show your work)***The following "T" A/C's show December 31, 2001 ending balances: Work-in-Process Finished Product $ 41,000 $ 148,000 January 31, 2002 balances are: Work-in-Process (WIP) $ 47,000 (dr.) Finished Goods (F/G) 152,000 (dr.) The Income Statement showed Sales of 309,000 and Gross Margin of 205,000. Based on the above information, what was the Cost Of Goods Manufactured? $ ___ Cost of Goods Available for Sale was $225,000 and Beginning Finished Gds Inventory was $25,000. If 40,000 units were produced, what was the unit cost of production ? (independent from A. above) $ ___. Given for Midwest Plumbing Company: ***(show your work)*** Estimated Manufacturing Overhead - $ 800,000 Direct Labor Hours - 40,000 Machine Hours - 600,000 Direct Labor Cost - $ 400,000 Calculate the pre-determined overhead rate per Direct Labor Hour. ___ Calculate the pre-determined overhead rate per Machine hour. ___

Explanation / Answer

Hi,

Please find the answers as follows;

1:

Part A:

Gross Margin = Sales - Cost of Goods Sold

205000 = 309000 - Cost of Goods Sold

Cost of Goods Sold = 309000 - 205000 = 104000

Cost of Goods Manufactured = Cost of Goods Sold + Closing WIP - Opening WIP

Cost of Goods Manufactured = 104000 + 47000 - 41000 = 110000

Part B:

Unit Cost of Production = (Cost of Goods Available for Sale - Beginning Finished Goods Inventory)/Units Produced = (225000 - 25000)/40000 = 5 Per Unit

2:

Part A:

Pre-determined overhead rate per (Direct Labor) = Estimated Manufacturing Overhead/Total Direct Labor Hours = 800000/40000 = 20 per direct labor hour

Part B:

Pre-determined overhead rate per (Machine Labor) = Estimated Manufacturing Overhead/Total Machine Hours = 800000/600000 = 1.33 per machine hour

Thanks.

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