Question
PROBLEM 16.7A The accounting records of Idaho Paper Company include the following information relating to the current year. Dec. 31 Jan. 1 Materials inventory .
PROBLEM 16.7A
The accounting records of Idaho Paper Company include the following information relating to the current year.
Dec. 31 Jan. 1
Materials inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,000 $25,000
Work in process inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,500 40,000
Finished goods inventory, Jan. 1 (10,000 units @ $21 per unit) . . . . . . . ? 210,000
Purchases of direct materials during year . . . . . . . . . . . . . . . . . . . . . . . . . . 330,000
Direct labor costs assigned to production . . . . . . . . . . . . . . . . . . . . . . . . . 375,000
Manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 637,500
The company manufactures a single product; during the current year, 45,000 units were manufactured and 40,000 units were sold.
Instructions
a. Prepare a schedule of the cost of finished goods manufactured for the current year. (Show a supporting computation of the cost of direct materials used during the year.)
b. Compute the average per-unit cost of production during the current year.
c. Compute the cost of goods sold during the year, assuming that the FIFO (first-in, first-out) method of inventory costing is used.
d. Compute the cost of the inventory of finished goods at December 31 of the current year, assuming that the FIFO (first-in, first-out) method of inventory costing is used.
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