Computing work-in-process inventory from balance sheet
Not what you're looking for?
On June 30, 2011, a tornado damaged Jensen Corporation's warehouse and factor completely destroying the work-in-process inventory. Neither the raw materials nor finished goods inventories were damaged. A physical inventory taken after the tornado revealed the following values:
Raw materials $87,000
Work-in-process 0
Finished goods $151,000
Total $238,000
The inventory of January 1, 2011, consisted of the following:
Raw materials $41,000
work-in-process $128,000
Finished goods $173,000
Total $342,000
A review of the books and records disclosed that the gross profit margin historically approximated 28% of sales. The sales total for the first six months of 2011 was $405,000. Raw material purchases totaled $150,000. Direct labor costs for this period were $112,000, and manufacturing overhead has historically been applied at 50% of direct labor.
Compute the value of the work-in-process inventory lost at June 30, 2011. Show supporting computations.
Purchase this Solution
Solution Summary
The expert computes the work-in-process inventory from balance sheets.
Solution Preview
Dear student,
Here is the answer:
sales 405000
less:gross margin 113400
cost of sales 291600
less:opening finished goods 173000
...
Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations