M2-8 Recording the Purchase and Issue of Raw Materials [LO 2-2, 2-4] Fairfield C

Question

M2-8 Recording the Purchase and Issue of Raw Materials [LO 2-2, 2-4]

Fairfield Company’s raw materials inventory transactions for the most recent month are summarized here:

1. How much of the raw materials cost would be added to the Work in Process Inventory account during the period?

2. How much of the raw materials costs would be added to the Manufacturing Overhead account?

3. Compute the ending balance in the Raw Materials Inventory account.
Ending Balance ???

Beginning raw materials $ 11,500 Purchases of raw materials 114,000 Raw materials issued Materials requisition 1445 46,500 For Job 101 Materials requisition 1446 31,500 For Job 102 Materials requisition 1447 14,500 Used on multiple jobs

Explanation / Answer

Particulars Amount Amount Materials: Opening balance        11,500 Add: purchases     1,14,000 Materials available     1,25,500 Less: Total materials used        92,500 Ending inventory            33,000

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