Question 56 1. The following information has been taken from the perpetual inven
ID: 2444568 • Letter: Q
Question
Question 56
1. The following information has been taken from the perpetual inventory system of Elite Mfg. Co. for the month ended AAugust 31:
Question #56
Purchases of direct materials
$60,000
Direct material used
$50,000
Direct labor costs assigned to production
$25,000
Manufacturing overhead costs incurred and applied
Balance in inventory
31-Aug
1-Aug
Materials
$ ?
$25,000
Work in Process
$65,000
$47,000
Finished Goods
$60,000
$43,000
2.
The cost of finished goods manufactured in August is:
A.
$147,000
B.
$92,000
C.
$57,000
D.
Some other amount
Question #56
Purchases of direct materials
$60,000
Direct material used
$50,000
Direct labor costs assigned to production
$25,000
Manufacturing overhead costs incurred and applied
Balance in inventory
31-Aug
1-Aug
Materials
$ ?
$25,000
Work in Process
$65,000
$47,000
Finished Goods
$60,000
$43,000
Explanation / Answer
1.
Material balance on 31st August = Beginning balance + Purchase materials – Used materials
= $25,000 + $60,000 - $50,000
= $35,000
2.
Cost of finished goods manufactured = Used materials + Direct labor cost + Beginning work in process – Ending work in process
= $50,000 + $25,000 + $47,000 - $65,000
= $57,000
Answer: C
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