PROBLEM 2

At the end of the current fiscal year Kitco Inc. had the following amounts in its raw material,
work in process and finished goods inventories and its cost of goods sold:
Raw Material:			$ 3,000,000
Work in Process:
Raw Material:			$ 1,000,000
Direct Labor			$ 3,000,000
MFOH			$ 4,000,000
Total			$ 8,000,000
Finished Goods:
Raw Material:			$ 500,000
Direct Labor			$ 2,500,000
MFOH			$ 3,000,000
Total			$ 6,000,000
Cost of Goods Sold
Raw Material:			$ 2,500,000
Direct Labor			$ 8,500,000
MFOH			$ 14,000,000
Total			$ 25,000,000
The Manufacturing Overhead account had a credit balance of $150,000 in it at the end of the fiscal year.
Required:
Using the above information, use the allocation method to distribute the ending balance in the
Manufacturing Overhead account to the appropriate inventory and COGS accounts and determine
their ending balance. Use "T" accounts to show your work.

RAW MATL INV WIP INV FG INV COGS

__________________ _________________________ ________________ _______________

MFG OH

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