Question
A tornado touched down and destroyed most of a company's facilities.However, the controller and the cost accountant were able to recover a small part of
A tornado touched down and destroyed most of a company's facilities.However, the controller and the cost accountant were able to recover a small part of manufacturing cost data for the current and prior month.They need records in order to file an insurance claim.
This is the data they were able to recover:
Direct Labor Cost $250,000
Purchase of Raw Materials $365,000
Raw Materials used for the month $350,000
Sales for the month $1,240,000
Gross Profit Ratio 40% of sales
Cost of goods available for sale $770,000
Manufacturing overhead was 60% of direct labor
Inventoriesat the end of the prior month:Finished Goods $38,000; Work in Process $25,000; and Raw Materials $19,000.
Instructions:
#1
Calculatethe amount of cost in theRaw Materials, Work in Process, and Finished Goods Inventory accountsfor the current month (when the tornado took place) using the information above.
#2
Using the knowledge acquired in the prior chapter and the ACG 2021 course (financial accounting), what analysis or conclusions can you make from the data?
#3
Can the data be used to prepare financial statements?
#4
Which Financial Statement could be prepared (check items included in each financial statement)?
#5
Will this be helpful for the insurance company to process a claim?
#6
Make a Exhibit 3-8 chart with the information provided, Cost of Goods Manufactured and Cost of Goods Sold
example below..
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