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    Flow of manufacturing costs

    The following data are taken from the accounting records of Ruiz Mfg. Co.:
    <i> Please see attachment for table</i>

    Compute the following amounts:
    a) Direct materials purchased during the period.
    e) The overhead application rate, assuming that overhead is applied to production as a percentage of direct labor costs.
    <i> Please see attachment for all questions</i>

    © BrainMass Inc. brainmass.com December 24, 2021, 4:58 pm ad1c9bdddf
    https://brainmass.com/business/accounting/flow-manufacturing-costs-19042

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    SOLUTION This solution is FREE courtesy of BrainMass!

    a) Direct Materials Purchased during the year : End of Year Inv + End of Yr WIP + Direct materials used - Beg Inv - Beg WIP
    =20,000+25,000 +20,000 - 17,000 - 18,000 = $30,000.

    B)Total Mfg costs charged to production : Direct Materials + direct labour + overheads - ( change in materials Inv + change in WIP)
    = 20000 +10000 +40,000 - ( 3000+7000) = $60,000

    C)Cost of finished goods = Total manufacturing cost ; same as above.

    d) Cost of goods sold = Total Manufacturing cost - change in finsihed goods Inv = 60,000 - 3000 = 57,000.

    e)Overhead application rate = total overhead/labour = 40000/10000 = 4times. or 400%.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 4:58 pm ad1c9bdddf>
    https://brainmass.com/business/accounting/flow-manufacturing-costs-19042

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