Costs and Balances

At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data hes collected, but he was unable to figure out some of the amounts. Review the following data and fill in the missing amounts on the chart for Able Baker Charlie Company. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured.

Data for February
Decrease in materials inventory	$3,600
Materials inventory on Feb. 28	50% of materials inventory on Jan. 31
Direct materials purchased	$11,700
Direct materials used	3 times the direct labor incurred
Total manufacturing costs incurred in period	$29,400
Total manufacturing costs incurred in period	70% of Cost of Goods Manufactured
Total manufacturing costs incurred in period	$10,000 less than Cost of Goods Sold

	Account Balances
Account	Jan. 31	Feb. 28	Costs Incurred
Materials Inventory	$7200	$3600	Direct Materials Used	$15300
Work in Process Inventory	27,000	14400	Direct Labor Incurred	5100
Finished Goods Inventory		16,500	Factory Overhead Incurred	9000
			Cost of Goods Sold