ilbn Four Harrison Company lost all but the following In the ins 25th of June, 2

Question

ilbn Four Harrison Company lost all but the following In the ins 25th of June, 2018. They hired you to help witn inventory records in an accid elp with the insurance claim of the osses. d Inventory balances on the 1st of June, Raw Materials Work-in-Process Finished Goods $120 25 80 Manufacturing activity from June 1 to June 25: $208 Direct Materials used Direct Materials purchased Cost of Goods Sold Prime Costs Cost of Goods Manufactured 300 278 120 ufacturing Overhead rate is 200% of Direct Materials costs. rmine the values of ending inventories of raw materials, work-in-proce ed goods lost in fire.

Explanation / Answer

Ending inventory of Finished Goods: Beginning Inventory of FG 80 Add: Cost of Goods manufactured 120 Total cost of goods available 200 Less: Cost of Goods sold 117 Ending inventory of Finished Goods: 83 Ending balance of Raw material: beginning Balance of Raw material 120 Add: Direct material purchase 300 Total cost of material available 420 Less: Material used 208 Ending balance of Raw material: 212 Ending balance of WIP: Beginning Balance of WIP 25 Add: Current manufacturing cost Material 208 Labour (278-208) 70 OH (208*200%) 416 Total manufacturing cost 694 Cost of goods manufacturing 719 Less: Cost of Goods manufactured 120 Ending balance of WIP: 599 Ending balance of Inventories lost in fire: Raw material 212 Wip 599 Finished Goods 83

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