ACCT6111_Fall 2013_Assignment 2_Case 3_Muscat Company_Product Cost Flows

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ACCT6111
Fall 2013 Assignment
2

Case 3: Product Cost Flows

Selected T-accounts for Muscat Company are given below
for the just completed year:

Raw Materials Manufacturing
Overhead

Bal. 1/1 30,000 Credits Debits 385,000 Credits

Debits 420,000____________

Bal, 12/31 60,000

Work
in Process Factory Wages Payable

Bal. 1/1 70,000 Credits
810.000 Debits
179,000 Bal, 1/1 10,000

Direct materials 320,000 Credits 175,000

Direct labor 110.000 Bal.
12/31 6,000

Overhead
400,000________________

Bal. 12/31

Finished
Goods
Cost of Goods Sold

Bal. 1/1 40.000 Credits Debits

Debits________________________

Bal, 12/31 130.000

Required:

1. What
was the cost of raw materials put into production during the year?

2. How
much of the materials in (1) above consisted of indirect materials?

3. How
much of the factory labor cost for the year consisted of indirect labor?

4. What
was the cost of goods manufactured for the year?

5. What
was the cost of goods sold for the year (before considering under-applied or
over-applied overhead)?

6. If
overhead is -applied to production on the basis of direct materials cost, what
rate was in effect during the year?

7. Was
manufacturing overhead under-applied or over-applied? By how much?

8. Compute the ending balance in the Work
in Process inventory account. Assume that this balance consists entirely of
goods started during the year. If $32,000 of this balance is direct materials
cost, how much of it is direct labor cost? Manufacturing overhead cost?

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