C2.60

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:

Direct materials purchased

$18,000

Work in processbeginning inventory

2,000

Direct materialsbeginning inventory

6,000

Direct materialsending inventory

10,000

Finished goodsbeginning inventory

12,000

Finished goodsending inventory

2,500

Sales

60,000

Manufacturing overhead and direct labour incurred

22,000

Gross profit percentage based on net sales

40%

Instructions

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?