On January 31, a snowstorm damaged the office of a small business, and some of the accounting information stored in the computer's memory was lost. The following information pertaining to January activities was retrieved from other sources:

Instructions
Calculate the following:
(a) What was the cost of direct materials used in January?
(b) What amount of work in process inventory was transferred out to finished goods during January?
(c) Assume that $20,000 of direct materials was used in January and that the cost of goods available for sale in January amounted to $40,000. What did the ending work in process inventory amount to?

Transcribed Image Text:

Direct materials purchased Work in process-beginning inventory Direct materials-beginning inventory Direct materials-ending inventory Finished goods-beginning inventory Finished goods-ending inventory Sales Manufacturing overhead and direct labour incurred Gross profit percentage based on net sales $18,000 2,000 6,000 10,000 12,000 2,500 60,000 22,000 40%