On November 30, 2022, there was a fire in the factory of Able Manufacturing Limited, where you work as the controller. The work in process inventory was completely destroyed, but both the materials and finished goods inventories were undamaged. Able uses normal job-order costing and its fiscal year end is December 31. Selected information for the periods ended October 31, 2022, and November 30, 2022, follows: October 31, 2022 November 30, 2022 Supplies (including both direct and indirect materials) $ 79,250 $ 73,250 Work in process inventory 58,875 ? Finished goods inventory 60,000 63,000 Cost of goods sold (year to date) 576,000 656,000 Accounts payable (relates to materials purchased only) 17,960 53,540 Manufacturing overhead incurred (year to date) 129,500 163,300 Manufacturing overhead applied 128,700 ? Other information for November 2022: Cash payments to suppliers $ 60,000 Payroll (including $15,375 indirect) 83,500 Indirect materials used 5,848 Over-applied overhead (during November only) 2,750 Instructions Calculate the normal cost of the work in process inventory lost during the fire. Direct materials used: $95,732 Manufacturing overhead applied: $36,550

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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On November 30, 2022, there was a fire in the factory of Able Manufacturing Limited, where you work as the controller. The work in process inventory was completely destroyed, but both the materials and finished goods inventories were undamaged.

Able uses normal job-order costing and its fiscal year end is December 31. Selected information for the periods ended October 31, 2022, and November 30, 2022, follows:

	October 31, 2022	November 30, 2022
Supplies (including both direct and indirect materials)	$ 79,250	$ 73,250
Work in process inventory	58,875	?
Finished goods inventory	60,000	63,000
Cost of goods sold (year to date)	576,000	656,000
Accounts payable (relates to materials purchased only)	17,960	53,540
Manufacturing overhead incurred (year to date)	129,500	163,300
Manufacturing overhead applied	128,700	?
Other information for November 2022:
Cash payments to suppliers	$ 60,000
Payroll (including $15,375 indirect)	83,500
Indirect materials used	5,848
Over-applied overhead (during November only)	2,750

Instructions

Calculate the normal cost of the work in process inventory lost during the fire.

Direct materials used: $95,732 Manufacturing overhead applied: $36,550

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