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An analysis of the accounts of Sheridan Company reveals the following manufacturing cost data for the month ended September 30, 2020. Inventories Beginning Ending Raw
An analysis of the accounts of Sheridan Company reveals the following manufacturing cost data for the month ended September 30, 2020. Inventories Beginning Ending Raw materials $12,500 $11,000 Work in process 6,800 5,400 Finished goods 9,600 11,700 Costs incurred: raw materials purchases $63,700, direct labor $50,800, manufacturing overhead $27,400. The specific overhead costs were: indirect labor $6,900, factory insurance $4,700, machinery depreciation $6,200, machinery repairs $2,500, factory utilities $4,000, miscellaneous factory costs $1,890. Assume that all raw materials used were direct materials. Question: Sheridan Company is considering the purchase of a new automated assembly line for its factory. The purchase would result in several changes in Sheridan cost structure. Both direct labor and indirect labor would decrease by 40%. Factory insurance would increase to $7,900, machinery depreciation would double, machinery repairs would decrease to $500, utilities would decrease to $2,200 and miscellaneous factory costs would increase to $2,000. Materials usage would remain at current levels. Analyze the new purchase by preparing a cost of goods manufactured schedule for September 30, 2020 using the new data.
An analysis of the accounts of Sheridan Company reveals the following manufacturing cost data for the month ended September 30, 2020.
Inventories Beginning Ending
Raw materials $12,500 $11,000
Work in process 6,800 5,400
Finished goods 9,600 11,700
Costs incurred: raw materials purchases $63,700, direct labor $50,800, manufacturing overhead $27,400. The specific overhead costs were: indirect labor $6,900, factory insurance $4,700, machinery depreciation $6,200, machinery repairs $2,500, factory utilities $4,000, miscellaneous factory costs $1,890. Assume that all raw materials used were direct materials.
Question: Sheridan Company is considering the purchase of a new automated assembly line for its factory. The purchase would result in several changes in Sheridan cost structure. Both direct labor and indirect labor would decrease by 40%. Factory insurance would increase to $7,900, machinery depreciation would double, machinery repairs would decrease to $500, utilities would decrease to $2,200 and miscellaneous factory costs would increase to $2,000. Materials usage would remain at current levels.
Analyze the new purchase by preparing a cost of goods manufactured schedule for September 30, 2020 using the new data.
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