2.X Company had the following inventory account balances in 2015: The following

Question

2.X Company had the following inventory account balances in 2015:

The following additional information for the year is available:

What was Cost of Goods Sold in 2015?

3&4. X Company has two production departments, X and Y. Listed below are budgeted information for the two departments, and actual information for one of its products, Product 1:

3. Using a plantwide allocation system with direct labor hours as the cost driver, what was the allocation to Product 1 [round overhead rates to the nearest cent]?

4. Using a departmental allocation system with machine hours as the cost driver in Department X and direct labor hours as the cost driver in Department Y, what was the allocation to Product 1 [round overhead rates to the nearest cent]?

Account January 1 December 31 Materials $17,308    $16,442      Work in Process 15,878    14,388      Finished Goods 14,322    14,322     

Explanation / Answer

Answer 2. Calculation OF Cost of Goods Manufactured WIP in the beginning                15,878 Add: Raw Material At the beginning                17,308 Add: Material Purchased During the year                61,530 Less: Raw material at the end              (16,442) Raw Material Used during the year                62,396 Direct Labour                26,539 Overhead                51,956 Less: WIP at the end              (14,388) Cost of Goods Manufactured              142,381 Calculation OF Cost of Goods Sold Finished Goods in the beginning                14,322 Add: Cost of Goods Manufactured              142,381 Less: Finished Goods at the end              (14,322) Cost of Goods Manufactured              142,381 Answer 3. All Products Product 1 Deptt. X Deptt. Y Deptt. X Deptt. Y Direct Labour Hours 60000 60000 720 206 Direct Labour in $              960,000              960,000          11,520          3,296 Overhead          7,200,000          1,900,000 Deptt X - 7200000/60000 X 720          86,400 Deptt y - 1900000/60000 X 206          6,523 Answer 4. All Products Product 1 Deptt. X Deptt. Y Deptt. X Deptt. Y Direct Labour Hours 60000 60000 720 206 Machine Hours 100000 140000 1000 840 Direct Labour in $              960,000              960,000          11,520          3,296 Overhead          7,200,000          1,900,000 Deptt X - 7200000/100000 X 1000          72,000 Deptt y - 1900000/60000 X 206          6,523

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