Compute the total cost of the units transferred to finished goods Inventory. JKL FABRICATIONS Inc. manufactures frames to bicycles. Each frame passes through three processes: CUTTING, WELDING & PAINTING. In July, the PAINTING Department reportedthe following data. . Beginning WIP consisted of 40,500 units, 95% complete with respect to direct labor and overhead. Costs in the beginning inventory included prime cost, P15,000; applied overhead P12,110 and transferred-in, P31,500. . Cost added to production during the month were direct materials, P72,900; direct labor P64,880; transferred- in P102,060. Overhead was assigned using the following information: Activity Rate Actual Driver Usage Inspection P7.50 per inspection hour 3,000 inspection hours Maintenance P 2 per maintenance hour 1,200 maintenance hours Receiving P10 per receiving order 1,000 receiving orders . At the end of the month, 121,500 units were transferred out to the Finished Goods Inventory, leaving 13,500 units in the ending work in processs, 25% to complete. . Units are inspected when they are 90% converted afterwars paints are added. . The compant is using first-in firs-out method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute the total cost of the units transferred to finished goods Inventory.

JKL FABRICATIONS Inc. manufactures frames to bicycles. Each frame passes through three processes: CUTTING, WELDING & PAINTING. In July, the PAINTING Department reportedthe following data.

. Beginning WIP consisted of 40,500 units, 95% complete with respect to direct labor and overhead. Costs in the beginning inventory included prime cost, P15,000; applied overhead P12,110 and transferred-in, P31,500.

. Cost added to production during the month were direct materials, P72,900; direct labor P64,880; transferred- in P102,060.

Overhead was assigned using the following information:

Activity Rate Actual Driver Usage

Inspection P7.50 per inspection hour 3,000 inspection hours

Maintenance P 2 per maintenance hour 1,200 maintenance hours

Receiving P10 per receiving order 1,000 receiving orders

. At the end of the month, 121,500 units were transferred out to the Finished Goods Inventory, leaving 13,500 units in the ending work in processs, 25% to complete.

. Units are inspected when they are 90% converted afterwars paints are added.

. The compant is using first-in firs-out method.

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