DeMond Chemicals has the following balances (in millions) on December 31, 2011: Factory overhead applied .............................$450 Cost
Question:
DeMond Chemicals has the following balances (in millions) on December 31, 2011:
Factory overhead applied .............................$450
Cost of goods sold ...........................................900
Factory overhead incurred .............................415
Direct-materials inventory ................................30
Finished-goods inventory ...............................180
WIP inventory ..................................................140
The cost of goods completed was $880. The cost of direct materials requisitioned for production during 2011 was $210. The cost of direct materials purchased was $225. Factory overhead was applied to production at a rate of 150 percent of direct labour cost.
Compute the beginning inventory balances of direct materials, WIP, and finished goods. Make these computations before considering any possible adjustments for over applied or under applied overhead.
Step by Step Answer:
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu