ework Help Save Bowen Company manufactures one product, it does not maintain any

Question

ework Help Save Bowen Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. denominator. The company purchased (with cash) and used 35,000 yards of raw materials at a cost of $10.00 per yard. Its direct laborers worked 20.100 hours and were paid a total of $290.200. The company started and completed 8,300 units of finished goods during the period. Bowen's standard cost card for its only product is as follows: Its predetermined overhead rate includes $1,000,000 of fixed overhead in the numerator Standard Standard Quantity or Hours Standard Price Cost Rate Inputs Direct materials Direct labor Fixed manufacturing overhead 3.2 yards $11.00 per yard 35.20 36.40 $20.00 per hour52.80 $123.60 2.6 hours Total standard cost per unit Required: 1. When recording the raw material purchases a. The Raw Materials inventory will increase (decrease) by how much? b The Cash will increase (decrease) by how much? 2 When recording the raw materials used in production: a. The Raw Materials inventory will increase (decrease) by how much? b. The Work in Process Inventory will increase (decrease) by how much? Prey 8 of 17E Next > e a

Explanation / Answer

1a. Raw material will increase by 350000 1b. Cash will Decrease by 350000 2a. Raw material will Decrease by 350000 2b. Work in process inventory will increase by 350000 3a. Work in process inventory will increase by 290200 3b. Cash will Decrease by 290200 4 Work in process inventory will increase by 402000 5 Finished goods will increase by 1042200 Raw material purchases 35,000 yards at $10 per yard = 350,000 Direct labor cost = 290,200 Overhead applied for 20,100 DLH at $20 per DLH = 402,000 Finished goods = 350,000+290,200+402,000 = 1,042,200

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