Question

Wealth Company has the following transactions for the month of November: Purchased materials on account for $300,000 Materials requisitioned for $75,000 Direct labor for the month was incurred (but not yet paid) of $50,000. Actual overhead for the month was $30,000. It has not been paid yet. (Charge to various payables.) Overhead is applied to production at the rate of 50% of direct labor. Jobs totaling $50,000 were transferred from Work-in-Process to Finished Goods. Jobs costing $34,000 were sold. Balances at the beginning of the month were: Materials $34,240 Work-in-Process 0 Finished Goods $12,000 What is the ending balance of Finished Goods

Answer 1

Answer:

Wealth Company

The ending balance of Finished Goods is:

= $28,000

Explanation:

a) Data and Calculations:

Raw materials $300,000 Accounts Payable $300,000

Work in Process $75,000 Raw materials $75,000

Work in Process $50,000 Payroll Payable $50,000

Manufacturing overhead $30,000 Overhead Payable $30,000

Work in Process $25,000 Manufacturing Overhead $25,000

Finished Goods $50,000 Work-in-Process $50,000

Cost of goods sold $34,000 Finished Goods $34,000

Balances at the beginning of the month were:

Materials $34,240

Work-in-Process 0

Finished Goods $12,000

Finished Goods $12,000

Work in process 50,000

Cost of goods   (34,000)

Ending balance $28,000