Question

problem 3-11 (algo) t-account analysis of cost flows lo3-2, lo3-3, lo3-4

selected t-accounts of moore company are given below for the just completed year:

required:

1. what was the cost of raw materials used in production?
2. how much of the materials in (1) above consisted of indirect materials?
3. how much of the factory labor cost is indirect labor?
4. what was the cost of goods manufactured?
5. what was the unadjusted cost of goods sold? do not include any underapplied or overapplied overhead in your answer.
6. if overhead is applied to production using direct labor cost, what was the predetermined overhead rate?
7. was manufacturing overhead underapplied or overapplied? by how much?
8. compute the ending balance in work in process. assume this balance consists entirely of goods started during the year. if $10,500 of this balance is direct labor cost, how much is direct materials cost? applied overhead cost?

Explanation:

Calculate raw materials used in production

Using the Indirect Materials Calculation knowledge point

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Determine indirect materials used

Using the Indirect Materials Calculation and Work in Process T-Account knowledge points

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Determine indirect labor cost

Using the Indirect Labor Calculation knowledge point

$$
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Calculate cost of goods manufactured

Using the Work in Process T-Account knowledge point

$$
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Calculate unadjusted cost of goods sold

Using the Work in Process T-Account knowledge point

$$
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Calculate predetermined overhead rate

Using the Predetermined Overhead Rate knowledge point

$$
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Determine underapplied or overapplied overhead

Using the Manufacturing Overhead T-Account knowledge point

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Analyze ending Work in Process components

Using the Work in Process T-Account and Predetermined Overhead Rate knowledge points

$$
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Answer:

Question 1

The cost of raw materials used in production is \$130,000.

Question 2

The amount of indirect materials is \$30,000.

Question 3

The amount of indirect labor is \$20,000.

Question 4

The cost of goods manufactured is \$500,000.

Question 5

The unadjusted cost of goods sold is \$475,000.

Question 6

The predetermined overhead rate is 124% of direct labor cost.

Question 7

Manufacturing overhead was overapplied by \$20,000.

Question 8

• Ending balance in Work in Process: \$33,200
• Direct materials cost: \$9,680
• Applied overhead cost: \$13,020