1. Fargo Enterprises had the following account balances for the quarter ending S
ID: 341636 • Letter: 1
Question
1. Fargo Enterprises had the following account balances for the quarter ending September 30, 2018 unless otherwise Beginning direct materials inventory Beginning finished goods inventory Beginning WIP inventory Direct labor Direct materials purchases Ending direct materials inventory Ending finished goods inventory Ending WIP inventory Factory overhead $50,000 100,000 260,000 350,000 58,000 88,000 80,000 320,000 ,400,000 240,000 Selling and administrative expenses Required: a. What was the amount of direct materials used for the quarter? b. What was the amount of cost of goods manufactured for the quarter? c What was the amount of cost of goods sold for the quarter? d. What was the amount of net income (assuming no income taxes) for the quarter? e. What was the total amount of conversion costs for the quarter? f. What was the total amount of prime costs quarter?Explanation / Answer
a) Direct material used = (50000+350000-58000) = 342000
b) Cost of goods manufactured = (78000+342000+260000+320000-80000) = 920000
c) Cost of goods sold = (100000+920000-88000) = 932000
d) Net income = (1400000-932000-240000) = 228000
e) Conversion cost = (260000+320000) = 580000
f) Prime cost = (342000+260000) = 602000
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