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The Ryde and Rowe Inc. had the following account balances as of January 1: Direct Materials Inventory . . . . . . . .
The Ryde and Rowe Inc. had the following account balances as of January 1: | |||||||||
Direct Materials Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 89,200 | |||||||||
Work in Process Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178,400 | |||||||||
Finished Goods Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253,600 | |||||||||
Manufacturing Overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 | |||||||||
During the month of January, all of the following occurred: | |||||||||
1. Direct labor costs were $442,000 for 18,000 hours worked. | |||||||||
2. Direct materials costing $335,750 and indirect materials costing $13,500 were purchased. | |||||||||
3. Sales commissions of $216,500 were earned by the sales force. | |||||||||
4. $326,000 worth of direct materials were used in production. | |||||||||
5. Advertising costs of $36,300 were incurred. | |||||||||
6. Factory supervisors earned salaries of $22,000. | |||||||||
7. Indirect labor costs for the month were $23,000. | |||||||||
8. Monthly depreciation on factory equipment was $24,500. | |||||||||
9. Utilities expense of $17,800 was incurred in the factory. | |||||||||
10. Equipment with manufacturing costs of $970,100 were transferred to finished goods. | |||||||||
11. Monthly insurance costs for the factory were $4,200. | |||||||||
12. $5,000 in property taxes on the factory were incurred and paid. | |||||||||
13. Equipment with manufacturing costs of $1,089,000 were sold for $1,550,000. | |||||||||
Instructions | |||||||||
a. If Ryde and Rowe assigns manufacturing overhead of $84,400, what will be the balances in | |||||||||
the Direct Materials, Work in Process, and Finished Goods Inventory accounts at the end of | |||||||||
January? | |||||||||
b. As of January 31, what will be the balance in the Manufacturing Overhead account? | |||||||||
c. What was Ryde and Rowes operating income for January? |
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