Rogers Manufacturing Corporation uses a job order costing system with normal costing, applying overhead to production at a rate of 140% of direct labor cost. At the beginning of the month of May, Accordion had the following inventories on hand: direct materials, $45,000: work in process, $30,000: and finished goods, $12,000. During the month of May, the following transactions occurred that relate to manufacturing operations for the month.
(a) Purchases of direct materials amounted to $225,000 for the month. The balance of direct materials on hand at the end of May was $38,000.
(b) Direct labor incurred for the month consisted of 25,000 hours at an average rate of $8.00 per hour.
(c) The following indirect manufacturing costs were incurred during May: indirect labor, $52,000: indirect materials, $74,000; factory utilities, $37,500: factory rent, $22,500: depreciation on factory equipment, $10,500; and miscellaneous factory overhead, $72,000.
(d) At the end of May, the company had one job still in process with $5,000 of direct materials and $7,500 of direct labor charged to it.
(e) At the end of May, the company had one job that was completed but had not yet been sold. This job had direct materials of $10,000 and direct labor of $12,000 charged to it, along with the appropriate amount of manufacturing overhead.
Required: Compute the following amounts for Rogers Manufacturing Corporation for the month of May.
(1) Ending work in Process Inventory.
(2) Manufacturing overhead applied to production.
(3) Cost of goods manufactured.
(4) Ending finished goods inventory
SOLUTION
PREVIEW
(1) Ending work in Process Inventory.
Ending work in process = Direct material + direct labor +
manufacturing overhead
=
5,000 + 7,500 + 7,500 x 140%
=
23,000
